JM Financial Asset Reconstruction Company cleared to replace Bank of India as petitioner

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A dedicated bankruptcy court has allowed JM Financial Asset Reconstruction Company (ARC) to replace original petitioner Bank of India in a plea seeking admission of National Steel & Agro Industries (NSAIL) in the dispute resolution process. business insolvency (CIRP).

BSE-listed National Steel & Agro owes about Rs 1,600 crore to its lenders. On Friday, the Mumbai bench of the National Company Law Tribunal, presided over by Judge Pradeep Narhari Deshmukh, cleared the substitution of JM Financial ARC, to whom the lenders assigned their debt as petitioner in an oral order and posted the hearing of the case on March 9.

Prior to this, Rohit Gupta, an attorney representing the JM Financial ARC, sought to admit the company under CIRP and appoint the company’s Interim Resolution Professional (IRP).

“Seven lenders have assigned their debt to JM Financial ARC, and the debtor company owes over Rs 1,600 crore to its lenders. We want the court to admit the company so that the company’s assets can be protected,” Gupta explained. .

Initially, in 2014, National Steel & Agro entered into a loan agreement with the consortium led by IDBI Bank for over Rs 1,431 crore, in which Bank of India sanctioned Rs 125 crore.

Apart from Bank of India, other lenders, mostly state-owned banks including IDBI Bank, State Bank of India, Bank of Maharashtra, Central Bank, Union Bank and Punjab National Bank have also ceded their debts to JM Financial ARC.

In the 2020-21 financial year, the company reported revenue of Rs 1,578 crore and loss of Rs 227 crore.

National Steel & Agro Industries has an installed capacity of approximately 3,80,000 TPA of galvanized steel according to the company’s website. On September 30, 2018, the company was declared a non-performing asset (NPA) after failing to repay its dues in accordance with the loan agreement. A lender opposed the company to NCLT in May 2019.

An email query to NSAIL elicited no response.

NSAIL, based in Mumbai, started in 1985; currently, besides manufacturing galvanized steel, it is also a major importer and exporter of commodities including flat steel, rice, wheat, soybean meal, lentils and other commodities agricultural.

“The company’s current liabilities exceeded current assets by Rs 1,775.72 crore as of December 31, 2021,” the company’s auditors said in their audit findings.

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