Vedanta Group firm Sesa Goa has secured a stay order from the Delhi High Court against Industrial Financial Corporation of India’s (IFCI) decision on the Bellary Steel sell-off, in which JSW Steel was declared the highest bidder.
“Our dispute is against the process followed by IFCI in the bidding. We have already taken up the matter with the Delhi High Court, which stayed the sale (order) last week,” Sesa Goa Managing Director P K Mukherjee said.
Last month, a consortium of lenders led by IFCI had declared JSW Steel as the highest bidder for acquiring the assets of Bellary Steel and Alloys (BSAL). Sesa Goa was the only other qualified contender. IFCI officials could not be reached for their comments.
“Our dispute is with the process...We were the only qualified bidder initially, and declared successful bidder verbally. Our people were told to come after lunch to collect the allotment letter. When we came back after lunch, we were told that there is another bidder and that bid is only marginally higher than our price,” Mukherjee said.
While Sesa Goa’s bid stood at Rs 206 crore, slightly more than the reserve price of Rs 205.63 crore, JSW quoted Rs 210 crore for the assets of the Karnataka-based company.
“The stay order came after we filed a petition and the next hearing will be in mid-February,” Mukherjee said, while clarifying that Sesa Goa did not have any issues against JSW Steel. “We have no problems with JSW at all...Our dispute is with the process which IFCI followed,” Mukherjee said.
According to the Delhi High Court website, the next hearing on the matter has been scheduled for February 22.
Headquartered in Bangalore, Bellary Steel and Alloys was promoted by S Madhav and S Parvathi, according to its website.
The company had planned to set up an integrated steel plant, with a capacity of five lakh tonnes per annum and a provision of taking it to 2 million tonnes, in Bellary, where JSW has its 7.8-MPTA plant.
However, BSAL, whose biggest asset is 700 acres of freehold land, could not complete the project and ran into debt. Thereafter, the consortium of lenders led by IFCI decided to sell the company’s assets.
“Bellary Steel is one such asset which is having land at its disposal and it has got all the approvals for 0.5-million tonne capacity. It will be a good opportunity for us to step in, as we are already present in Karnataka through our mining operations,” Mukherjee said.
According to the tender document, an inter-se bidding process was to be conducted among eligible bidders and the highest bidder was to be declared successful.
