ET: IMR plans to buy a stressed steel plant in Odisha

21 February 2019: IMR Metallurgical Resources AG, the Swiss commodity trading group that recently bought Tata Steel’s iron ore mines in South Africa, is in advanced talks with bankers to acquire a stressed steel plant in Odisha, a top official said. 

“We are speaking to bankers to acquire a stressed steel plant in the eastern region,” said Sanjay Sinha, director at IMR Metallurgical Resources. “We hope to close the deal soon.” 

IMR, which had bid for ferro alloys producer FACOR under the NCLT last year, is now keen to expand in India by “acquiring small and medium-size firms outside the NCLT that can help us get into steel production”, Sinha told ET. 

He did not reveal the identity of the plant the company seeks to buy. 

The deal, if it goes through, is likely to set a precedent for foreign firms buying into India’s steel industry. 

IMR is involved in global trading, marketing and financing of bulk commodities like, coking coal, iron ore, and iron & steel products. 

While the Swiss trader will ensure raw material linkage to the steel plant through its global trading portfolio, it could partner PE firms in the acquisition. It is also in dialogue with professional management services firms to bring one of them on board as operational partner to run these plants. 

1

“India’s steel sector is poised for big growth,” Sinha said. “We believe, with professional management on board and unsustainable debt out of the books, these assets would stand to offer good returns.” 

IMR has just concluded the deal for buying out Tata Steel’s mining assets in South Africa, the domestic steel major had informed the exchanges in a notification on Tuesday. In October last year, as part of its plans to scale down operations in that country, Tata Steel had agreed to sell an iron ore mine in South Africa to IMR for 366 million South African rand, or about $25.6 million (approx Rs 188 crore). The transaction was expected to close within a year, but the deal was concluded before the stipulated time.

The Economic Times reported

RCom requests lenders to release INR 260cr received from income tax refunds

21 February 2019: With reference to the Order dated February 20, 2018 of the Hon’ble Supreme Court, directing RCOM Group to pay Rs. 550 crore to Ericsson, we enclose herewith the media release dated February 21, 2019 being issued by the Company which is self explanatory.
A Reliance Communications Limited spokesperson said:
  1. Reliance Communications group has requested urgent approval from its lenders to release approx. Rs 260 crore received from Income Tax refunds, lying in its bank account, directly to Ericsson.
  2. A sum of Rs 118 crore has already been deposited with the Hon’ble Supreme Court.
  3. RCOM is confident of raising the balance approx Rs. 200 crore for payment to Ericsson, in order that the entire Rs 550 crore plus interest thereon stands paid to Ericsson well within the time of 4 weeks allowed by the Hon’ble Supreme Court.
The company press release

BS: Ericsson, RCom case Chronology

20 February 2019: The following is the chronology of events in the case in which the Supreme Court Wednesday held Reliance Communications Ltd (RCom) Chairman Anil Ambani and others guilty of contempt of court.

– Jan 25, 2013: Ericsson, RCom enter pact to operate and manage RCom’s nationwide telecom network.

– May 7, 2017: Ericsson issues three notices to three Reliance companies to pay Rs 9.78 crore in dues.

May 19: The companies state performance of Ericsson had been inconsistent 

Sep 7: Ericsson terminates agreement, asks them to pay outstanding amount in full.

Sep 8: Ericsson files three applications under Insolvency and Bankruptcy Code as operational creditors.

– May 15, 2018: National Company Law Tribunal admits Ericsson’s plea for beginning of insolvency proceedings against RCom.

May 18: NCLT appoints three Interim Resolution Professionals for the process.

May 30: National Company Law Appellate Tribunal stays bankruptcy proceedings, RCom says it has agreed to pay Rs 550 crore dues within 120 days.

July 17: 3 Reliance companies file plea in SC seeking quashing of corporate insolvency resolution process in view of settlement of disputes between them and Ericsson.

Aug 3: SC approves settlement between RCom and Ericsson, allows RCom to sell assets worth about Rs 25,000 crore.

Aug 9: Undertakings given by chairmen of Companies says dues will be paid upon sale of company’s assets.

Sep 27: Reliance firms seek extension of 60 days.

Oct 1: Ericsson files contempt plea against RCom and the group companies.

Oct 23: SC grants RCom till Dec 15 for paying Ericsson.

Dec 12: RCom moves second application in SC for extension of time.

Dec 13: SC refuses any such extension.

– Jan 21, 2019: Three Reliance Companies inform SC Rs 118 crore had already been deposited with the apex court’s Registry.

Feb 1: RCom group writes to stock exchanges, making it clear that they will not resist the corporate insolvency resolution process that had been stayed.

Feb 20: SC holds Anil Ambani and others guilty of contempt of court.

The Business Standard reported

BS: Mapletree moves NCLT against Falcon Tyres’ lenders over its resolution plan

20 February 2019: Mapletree Leather Goods, the sole resolution applicant for the Ruia Group-owned Falcon Tyres, which is currently undergoing insolvency proceedings under the Bengaluru bench of the NCLT, has accused Edelweiss Asset Reconstruction Company, among other lenders, of acting contrary to the provisions of the Insolvency and Bankruptcy Code (IBC) by rejecting its resolution plan.

In a petition to the NCLT, Mapletree alleged that its proposed resolution plan of Rs 310, which was modified in December last year, after the Committee of Creditors (CoC) of Falcon Tyres raised objections, was rejected despite it being the sole applicant to save Falcon Tyres from liquidation.
Edelweiss, which took this Ruia Group company in NCLT, is the largest lender in Falcon Tyres after it took over loans from various financial institutions of Rs 20 crore and has around 85 per cent voting share in the CoC.
“The applicant (Mapletree) further sent e-mails to the respondents (lenders) informing that they are open to discussions on the terms of the resolution plan and further requested not to initiate liquidation proceedings,” the petition filed by Mapletree said.
It also claimed that its offer was superior than the liquidation value of Falcon Tyres and its plan included a working capital infusion of around Rs 150 crore.
According to sources close to Mapletree, in face of no tyre maker in the country evincing interest to acquire the assets of Falcon tyres owing to the asset quality, it submitted a bid, revised it upon recommendations of the lenders and claimed that the plan is complaint to IBC provisions.
“Lenders, however, rejected the offer and the resolution professional (RP) may soon approach NCLT suggesting liquidation as the only option. How can the RP propose liquidation in the presence of a resolution plan that promises to pay the lenders and workers, covers the resolution costs, secures the jobs of the employees besides others? This is against the spirit of IBC,” the source close to Mapletree said.

On the other hand, lenders reasoned that although Mapletree put in a bid, its offer was rejected as the upfront payment was too low and it promised to pay around Rs 100 crore over a three-year timeframe.

“Lenders aren’t willing to sit on bad debts for so long and want speedier recovery,” a lender to Falcon Tyres said.

In turn, lenders have suggested to Mapletree that if it is interested in the Falcon Tyre buyout,it may participate when the company is liquidated.

The lenders have raised concern about Mapletree’s ability to turn the stressed company around, given that it is involved in tanning and dressing of leather, manufacture of luggage handbags, saddlers and harnesses. The applicant on its part has proposed to set up a monitoring committee of nominees from the lenders, workmen, RP and others who will look after the progress of the turnaround.

It will also seek advisory from industry professionals as well as retired judge from the Supreme Court or the High Court to monitor compliance and technical collaborations.

Nevertheless, Mapletree has approached the NCLT asking it to order the lenders to consider its proposal.

In May 2018, at Edelweiss’ behest, the NCLT ordered commencement of the insolvency resolution process. However, it was the second time Edelweiss has resorted to legal means to settle its claim. In 2017, it had moved court seeking liquidation but had withdrawn its plea at later stages of the case.

This asset reconstruction company was roped in by Falcon Tyres in 2015 to identify investors and reshuffle the management with the aim of mitigating accumulated losses. By 2017, Edelweiss had acquired about 85 per cent of Falcon Tyres’s debt, becoming its largest lender. That year, moved court for liquidation.

The Ruia Group, led by industrialist Pawan Ruia, once considered the turnaround tycoon, acquired Falcon Tyres in December 2005 but by January 2015, lost control of the company after it became a minority stakeholder in its own firm.

Its other acquisitions – Dunlop India and Jessop & Company – also turned sick and closed down with the West Bengal government stepping in to take control of these two companies.

The Business Standard reported

BS: Maharashtra Seamless shines after resolution plan for acquisition

20 February 2019: Maharashtra Seamless rose 2.1% to Rs 442 at 11:45 IST on BSE after the company made payment of Rs 477 crore for acquisition of United Seamless Tubulaar.

The announcement was made after market hours yesterday, 19 February 2019. 

Meanwhile, the S&P BSE Sensex was up 202.36 points or 0.57% at 35,554.97

On BSE, so far 6,310 shares were traded in the counter as against average daily volume of 5,628 shares in the past one quarter. The stock hit a high of Rs 449 and a low of Rs 440.95 so far during the day. 

Maharashtra Seamless made payment of Rs 477 crore for acquisition of United Seamless Tubulaar (USTPL) under the Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code 2016 as approved by Hyderabad Bench of National Company Law Tribunal (NCLT). 

Maharashtra Seamless’ net profit surged 139.28% to Rs 92.77 crore on 39.79% rise in net sales to Rs 785.88 crore in Q3 December 2018 over Q3 December 2017.

Maharashtra Seamless manufactures seamless pipes & tubes.

The Business Standard reported

NIE: Telangana HC asks Anrak how it’ll run without any funds

20 February 2019: A division bench of Telangana High Court on Tuesday questioned Anrak Aluminium Limited as to how it would operate in the event of cancellation of agreement by the government for supply of raw material and no scope to get raw material from Odisha state.

The bench was dealing with an appeal by RBI against the order of a single judge who directed SBI to withdraw the petition filed under the Insolvency and Bankruptcy Code. Anrak had established an aluminium refinery unit with an investment of Rs 6,000 crore in Andhra Pradesh. However, it has failed to commence its operations and faced pressure from banks for repayment of loans.

A consortium of banks agreed to a one-time settlement proposal. In the meantime, SBI moved the tribunal. Aggrieved with the same, Anrak moved the HC.

The New Indian Express reported