Jindal Stainless gets NCLAT's green signal to bid for Rathi Super Steel; stock spurts ~5%

21 Nov 2022 , 09:45 AM

The NCLAT upheld the NCLT order allowing Jindal Stainless to participate in the auction of debt-ridden Rathi Super Steel even though a bidder was already selected.

The National Company Law Appellate Tribunal (NCLAT) stated that the NCLT “did not commit any error” because sales were not completed and the goal was to maximize assets, so it “sees no reason to take a different view.”

“The Adjudicating Authority (NCLT) made no error in taking note of the offer made by Respondent No 1 (JSL), who made an initial offer of Rs190 crore and the revised offer was Rs201 crore, which was much higher than the one on which Appellant was declared successful bidder,” the NCLAT said.

Jindal Stainless submitted an Rs190 crore bid for Rathi Super Steel following the liquidator’s application with the National Company Law Tribunal (NCLT) seeking closure of the liquidation process and approval of sale terms and conditions to Rimjhim Ispat and Synergy Steel.

Rimjhim Ispat and Synergy Steel was named the highest bidder in the e-auction, with an Rs177.50 crore offer for Rathi Super Steel as a going concern, and a letter of intent was also issued on July 1, 2021.

JSL, on the other hand, approached the NCLT on October 3, 2021, and filed an application for consideration of its bid to acquire Rathi Super Steel as a going concern. JSL extended an offer of Rs190 crore, payable within 90 days of the bid’s acceptance.

The NCLT initiated the corporate insolvency resolution process against Rathi Super Steel on June 12, 2019. However, it could not attract any resolution plan and was forced to liquidate.

At around 9.49 AM, Jindal Stainless was trading at Rs175.45 up by 5.31% from its previous closing of Rs166.60 on the BSE. The scrip opened at Rs172 and touched intraday high and low of Rs180.70 and Rs171.40 respectively.

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