NCLT approves Vedanta bid for Electrosteel
The stressed asset problem in the banking system is getting momentum and has seen its first result today. Electrosteel Steels Ltd becomes the first of the 12 accounts to get resolved under NCLT proceedings.
The NCLT approved the resolution plan submitted by Vedanta Ltd which was one of the largest bidders for the company. The total debt owned by Electrosteel Steel Ltd. was Rs.13,000 crore, out of which Rs.5,000 crore was given by State Bank of India.
Five out of the first 12 stressed assets are on the verge of final resolution plan as the committee of creditors has finalised the best possible resolution plan. Under the insolvency proceedings code, the accounts must get resolved within the deadline of 270 days, which will end by the end of this month.
Vedanta expects to turn around the company. The acquisition will benefit Vedanta as Electrosteel’s Jharkhand plant is in the vicinity of Vedanta’s iron ore mines, giving it economies of scale to enter into steel manufacturing.
Vedanta opened positve on the bourses and trading at Rs.291 per share today, while electrosteel steel ltd is currently trading on lower circuit at Rs.2.85 per share