City-based Shakambhari Ispat and Power Ltd (SIPL) on Tuesday announced taking control of SPS Steels Rolling Mills Ltd and its brand 'Elegant Steel', after the NCLT approved a resolution plan worth Rs 270 crore.
"We have taken control of SPS management and assets including the brand from April 12, after we completed the required payment. Our resolution plan was worth Rs 270 crore, which was approved by NCLT Kolkata," Shakambhari Group Chairman and Managing Director Deepak Kr Agarwal said.
SIPL was last headed by Vipin Vora of the SPS Group, which once claimed to have a turnover of Rs 5,000 crore. It also faced a CBI probe for an alleged bank fraud case.
Following continuous defaults, SPS was referred to NCLT about 18 months ago.
Agarwal said the main target of the Shakambhari Group was the "well-known brand, which had a decent marketshare" in the retail TMT bars and structurals segment, and not its physical assets.
He said the group would be pumping Rs 150 crore in modernising the SPS plant and setting up a captive power plant.
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"Energy cost per tonne at SPS is higher by Rs 700 compared to our other plants. This has to be corrected," SIPL advisor Ranjan Barma said.
Agarwal said SIPL aims to expand the 'Elegant Steel' brand beyond the eastern region, and is looking at taking over more such plants, including in north India.
"We want to take the brand to the northern markets. We are evaluating Sarfesi and insolvency assets for more takeovers close to our potential markets. We have earmarked at least Rs 300 crore for the purpose," Barma said.
"The current turnover of the company (SPS) is Rs 407 crore and it is expected to touch Rs 1,000 crore in the current financial year," Agarwal said.
The Shakambhari Group, following the takeover, is aiming at a topline of Rs 3,000 crore in the current fiscal from Rs 1,800 crore, he said.
An investment of Rs 700 crore, including Rs 550 crore in a 2-million tonne pellet plant, is lined up over the next two to three years.
Meanwhile, the second highest bidder had approached the National Company Law Appellate Tribunal, contesting the resolution.
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