JSW Steel receives Lenders Approval to acquire Asian Colour Coated Ispat

India's steel giant, JSW Steel has moved a step closer to acquire debt-ridden Asian Colour Coated Ispat Ltd (ACCIL) that was referred to the insolvency court by RBI in July last year. As per the latest updates, the company's bid has received approval from 80% of the lenders, the voting for which was done on Friday.

Asian Colour Coated Ispat specialises in downstream, galvanised and colour coated products. It has manufacturing facilities close to Delhi and Mumbai, and exports its products to Europe, Latin America, and Africa. It has an annual capacity of 1 MnT.

JSW Steel has offered to pay INR 1,525 crore to the lenders of the asset, which makes up for a little more than 30% of the total dues of INR 5,000 crore that the asset owes to banks. Operational creditors that owed a total of INR 507 crore will be getting INR 25 crore from JSW Steel. SBI, Bank of Baroda and IDBI Bank are the main lenders to Asian Colour Coated.
JSW Steel will be issued a letter of intent and the resolution plan will be placed before the National Company Law Tribunal (NCLT) for the final approval.

In May'9, JSW Steel which was the sole bidder for the company had revised its bid for Asian Colour Coated Ispat Ltd from INR 1,200 crore to INR 1,500 crore in order to acquire the debt-ridden company in an insolvency driven process after the lenders convinced the company to offer a better deal. In its first bid, JSW Steel had offered INR 1,200 crore including INR 800 crore for secured financial creditors and INR 400 crore for operational creditors.

Acquisition of Asian Colour Coated Ispat will be the third successful acquisition through the insolvency driven process. The asset will be a good fit for JSW Steel that is almost tripling its colour coated steel capacity to 2 MnT per annum over a year and a half as part of its strategy to augment capacities of value added steel products that are seeing a growth in demand and also earn the manufacturers higher margins.

It had earlier acquired Monnet Ispat for INR 2,875 crore in a joint venture with Aion Capital. Though JSW Steel's bid of INR 19,300 crore to acquire Bhushan Power and Steel was approved by the lenders last October, the final approval is delayed due to cases filed by the promoters of Bhushan Power.