Tata Steel Mining Ltd gets bankrupt Rohit Ferro-Tech Ltd
Tata Steel Mining Ltd, a wholly owned subsidiary of Tata Steel Limited, has become the successful resolution applicant for Calcutta-based ferro chrome maker Rohit Ferro-Tech Ltd.
Ten bidders, including Vedanta Ltd and Jindal Stainless, were in the fray for the assets of the company that include three ferro chrome plants, one in Odisha and the others in Bengal. It also has a stainless steel unit in Bengal.
The committee of creditors of Rohit Ferro-Tech on June 5 approved the resolution plan of TSML, which has also received and accepted the letter of intent for the acquisition of the company. The plan will be implemented after receiving requisite approvals from the National Company Law Tribunal.
T.V. Narendran, managing director and CEO of Tata Steel, told The Telegraph, “Tata Steel has a rich history in chrome ore mining and has one of the largest ferro alloy businesses in the world. The Rohit Ferro-Tech acquisition will strengthen our position in the business.”
TSML has been chosen as the anchor company to carry out the commercial mining activity of Tata Steel Group. It is one of the four business verticals the parent is forming to drive scale and synergy of operations.
The RFT acquisition will allow TSML to double its 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.
“Tata Steel Mining has been created as a vehicle for
us to leverage our position as one of the oldest and largest miners in the country,” Narendran added.
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.
RFT’s other ferro chrome plants are located at Bishnupur and Haldia in Bengal. The stainless steel plant is at Bishnupur. The company produced 56,400 tonnes of ferro alloys, according to the annual report, in 2019-20, compared with 63,749 tonnes a year before. It also produced 55,750 tonnes of stainless steel in that fiscal.
It was sent for the corporate insolvency resolution process by an order of the Calcutta bench of the NCLT on February 7, 2020, and Supriyo Kumar Chaudhuri was appointed as the resolution professional. RFT owes Rs 3,901.93 crore to financial creditors, led by State Bank of India, which had nearly 50 per cent of the vote share in the CoC. Sources said the Tata bid could be in the range of Rs 500 crore.
TSML was a late entrant in the fray for Rohit. It submitted an expression of interest after the final date of submitting EoI was over. However, the CoC allowed the Tata Company to participate in order to maximise value from the corporate debtor.