Tata Steel Mining Ltd (TSML), a wholly owned subsidiary of Tata Steel, has acquired Calcutta-based Rohit Ferro Tech Ltd for Rs 617 crore from the bankruptcy court.
The National Company Law Tribunal’s Calcutta bench pronounced the order on Thursday, approving TSML’s resolution plan which includes an additional investment of Rs 164 crore to revive Rohit Ferro which has operations in Bengal and Odisha.
Commenting on the development, T.V. Narendran, managing director & CEO of Tata Steel Group, told The Telegraph: “It (the acquisition) helps us consolidate our position in the ferro alloy business. The plant in Bengal is a stainless steel facility and we look forward to having it in our fold.”
Following the implementation of the plan, the shares of the company will be delisted from the stock exchange at zero exit price for the equity shareholders. Further, in terms of the plan, the entire existing paid-up equity share capital of the company will stand extinguished. Trading in the stock has already been suspended from Thursday .
The company was admitted for the corporate resolution insolvency process in February 2020 and Supriyo Kumar Chaudhury was appointed as the resolution professional. Even as Tata Steel Mining was declared as the successful resolution applicant in June 2021, the approval of the plan was delayed due to legal issues.
The Telegraph had reported on June 8 that Tata Steel Mining had emerged as the successful resolution applicant.
According to the plan approved by the NCLT, the secured financial creditors, led by State Bank of India, would get Rs 515 crore compared with their admitted claim of Rs 3,885.55 crore, while workmen and employees would get their entire claim of Rs 2.12 crore.
Operational creditors, other than related parties, will get Rs 15 crore compared with their admitted claim of Rs 260.83 crore.
Moreover, TSML will stump up Rs 85 crore as the cost of CIRP.
The resolution will also bring joy to over 1,000 direct and indirect workers of the sick company, who would now be under the Tata fold.
The acquisition will enable Tata Steel Mining to double ferro chrome manufacturing capacity to 900,000 tonnes a year.
One of the plants of Rohit Ferro is located only 40 kilometres away from the Tata chrome ore mines in Jajpur district of Odisha. The Bengal plant of Rohit Ferro is located in Bishnupur and it also has a plot at Haldia.
TSML has ferro chrome plants in Athagarh and Gopalpur in Odisha and three chromite mines, namely Sukinda, Kamarda and Saruabil, in Jajpur.
The Tata company had acquired the mines in the 2020 mineral auctions for which leases were granted for 50 years. The mines have now been operational with an annual capacity of over 1.5 million tonnes making it the largest player in chrome ore mining in India.