msp metallics: Bankruptcy court approves Orissa Metaliks recovery plan for MSP Metallics

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The bankruptcy court has approved a recovery plan submitted by Orissa Metaliks Pvt Ltd (OMPL) for integrated steelmaker MSP Metallics Ltd.

Kolkata-based OMPL is paying around Rs 800 crore, while the company’s admitted debts stand at over Rs 2,735 crore. The lenders approved the plan with a 100% vote.

In 2020, the state-owned Central

had approached the Kolkata bench of the National Company Law Tribunal after MSP Metallics failed to refund its dues. However, in April last year, the company’s main lender, (), on behalf of the consortium, sold the debt of the Jharsuguda-based 250,000 tonnes per annum steel plant to CFM Asset Reconstruction Pvt Ltd.

“According to the CoC (Committee of Creditors), the plan meets the requirement of being viable and feasible for the recovery of the debtor business (MSP Metallics),” said the bench, chaired by members Rohit Kapoor and Harish. Chander Suri, in a statement. Order of 32 pages on July 11.

“With regard to the issue of granting a deadline to comply with legal obligations / seek sanctions from government authorities, the requester of the resolution (OMPL) is invited to do the same within a period of one year “, said the court.

He said the successful resolution plan proposes a financial outlay of Rs. 800.02 crore, which is well above the company’s average fair market value of Rs 495 crore and liquidation value of Rs 347 crore. .

The company owed more than Rs 1,500 crore to its financial lenders. SBI holds 37.2% voting rights in the CoC, while lenders include

, , , Central Bank of India, and Bank of India.

According to the MSP Metallics website, the company has signed a Memorandum of Understanding (MoU) with the government of Odisha and secured a coal bond for its steel mill. The company, incorporated in 1997, says its plant covers 370 acres and is close to large deposits of iron ore, coal and limestone in Odisha’s metallurgical belt.

Currently, OMPL, promoted by Sajjan Kumar Patwari, has two manufacturing plants located at Kharagpur and Jhargram in West Bengal. With the acquisition of MSP Metallics, the company will also have a presence in neighboring Odisha.

The development comes about three months after investment firm Nithia Capital acquired Crest Steel & Power through the bankruptcy process for a total consideration of Rs 600 crore. Crest Steel & Power had been under the corporate insolvency resolution process since August 2018. In 2020, its admitted financial liability was approximately Rs 3,118 crore.

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