Mumbai, Jul 19 (PTI): The National Company Law Tribunal (NCLT) today approved a Rs 2,875-crore bid by a consrotium of Aion Investments-JSW Steel to acquire the bankrupt Monnet Ispat & Energy, JSW Steel said.

The bankrpupt Monnet owes over Rs 11,000 crore to a clutch of lenders. This means that banks and other financial creditors will take a massive 74 per cent haircut as the bid is worth only three-fourths or 26 per cent of the dues.

The Aion-JSW consortium was the sole bidder for the 1.5 million tonne asset in Chhattisgrah, the company added.

JSW Steel said detailed NCLT order is awaited as the tribunal gave a verbal order today with some modifications to the original bid.

But it is not immediately known what are the modifications that the tribunal has sought, and when contacted JSW Steel refused to elaborate stating they are awaiting the detailed order.

“NCLT today verbally approved the bid by Aion Investments-JSW Steel for Monnet Ispat. The consortium will hold 75 per cent equity in in Monnet. Of this Aion will hold about 70 per cent and the rest will be held by JSW Steel,” Aion said in a statement.

“The resolution plan submitted by our consortium and approved by the committee of creditors of Monnet was approved with modifications at today’s hearing by the Mumbai bench of the NCLT,” JSW Steel said in a statement.

The consortioum earlier had discussed points like acceptance of payment to operational creditors aggregating to Rs 25 crore and small shareholders to continue with the company, sources said, adding there may be some more modifications which will be known in the written order.

The acquisition of Monnet Ispat is expected to help JSW Steel consolidate its position in Eastern markets.

Monnet Ispat, once one of the country’s foremost steel makers, ran a successful coal-based sponge iron plant with an annul capacity of 1.5 million tonne in Chhattisgrah.

The company ran into problmes when the coal mines attached to the plant was cancelled in 2014 after the Supreme Court order. Crashing steel prices on account of Chinese dumping further aggravated its crisis and resulted into bankruptcy proceedings.

Monnet was one of the 12 accounts that the Reserve Bank had identified in its first list tagged as the ‘dirty dozen’ for an immediate resolution mid-last year.

This is published unedited from the PTI feed.