The committee of creditors has approved the offer made by a consortium of Aion Capital and JSW Steel Ltd for Monnet Ispat Ltd, according to media reports. The offer consists of a payment of Rs2,450cr to the lenders and equity funding of Rs1,050cr; the remaining debt will be acquired by the consortium for Rs200cr. The consortium was the sole bidder for Monnet Ispat. The debt of Monnet Ispat currently stands at ~Rs10,237cr.
Aion Capital holds a 70% stake in the consortium with JSW Steel holding the remaining 30%. Under the terms of the deal, the new consortium would hold 75% in Monnet Ispat, while 18% would be held by lenders and 3% by the existing promoters. The existing promoters of Monnet Ispat currently hold a 25.27% stake in the company.
Under the terms of the deal, there is significant dilution of equity especially for minority shareholders. However, till the deal details are formally announced, it would be possible to accurately estimate the benefits for minority shareholders from this deal.
Monnet Ispat has an integrated steel plant with a production capacity of 1.5mn tonnes per annum (mtpa), with a 230MW captive power plant. The company also has coal beneficiation facilities with a total production capacity of 7.5mtpa.
Source: India Infoline