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JSW Steel plans to bid for the insolvent Gontermann Peipers (India), owned by Pramod and Vinod Mittal, younger brothers of Lakshmi Mittal, promoter of the world's largest steel company, ArcelorMittal.
Kolkata-based Gontermann, which manufactures cast and forged rolls, was dragged to the National Company Law Tribunal (NCLT) by an operational creditor last December. In all, the company owes about ₹350 crore to financial and operational creditors and in workmen dues, sources said.
Besides JSW Steel, an asset reconstruction company has evinced interest in the stressed asset. Eventually, more bidders may join the race as the deadline for placing expressions of interest (EoIs) is October 8, the sources added.
JSW Steel declined to comment on the development.
Earlier bid
Incidentally, three years ago, JSW Steel was negotiating to acquire Gontermann Peipers, which was promoted in technical collaboration with Germany’s Gontermann-Peipers GmbH, but backed out due to the high valuation.
The business ties between Sajjan Jindal-promoted JSW Steel and the Mittal brothers (Pramod and Vinod) date back to over a decade. In 2010, JSW Steel had bought Mittals-owned Ispat Industries at Dolvi in Maharashtra for ₹2,157 crore. Since then, not only has JSW Steel set up a pellet plant there but also come close to doubling the capacity of the Dolvi plant to 10 mtpa.
JSW Steel may be able to close the Gontermann deal for less than ₹100 crore and subsequently expand capacity as there is surplus land available near the plant site, said an analyst.
Of late, JSW Steel has been showing interest in buying downstream asset to boost its profit margin. It recently acquired Monnet Ispat in a insolvency driven process and is in the process of turning it around.
It is also close to finalising a deal to acquire the insolvent Asian Colour Coated Ispat for ₹1,500 crore. The bid placed by JSW Steel has been approved by the lenders but US-based financial investor Interups Inc, which had not placed an EoI earlier, has now offered to pay a higher price for Asian Colour Coated.
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