Electrosteel is the first to get approval from the National Company Law Tribunal (NCLT), among a dozen of the country’s biggest loan defaulters which were pushed to bankruptcy proceedings last year.
A Vedanta Ltd unit will buy debt-ridden Electrosteel for 18.05 billion rupees ($274.96 million) and provide additional funds worth 35.15 billion rupees, the company said in a statement.
Vedanta Ltd, the Indian unit of diversified mining group Vedanta Resources Plc (VED.L), will hold about 90 percent of Electrosteel and the rest by Electrosteel’s shareholders and financial creditors.
The funds will be used by Electrosteel to fully settle debts owed to existing financial creditors, by payment of 53.20 billion rupees. The company had received claims totalling 133 billion rupees from its creditors.
Vedanta Ltd had won an auction to acquire Electrosteel last month. Tata Steel (TISC.NS), privately held Renaissance Steel and Edelweiss Alternative Asset Advisors Pte Ltd were the other suitors for Electrosteel Steels.
Reporting By Arnab Paul in Bengaluru, Editing by Sherry Jacob-Phillips and Shounak Dasgupta