Monnet Ispat and Energy which owed Rs 11,000 crore to the banks, was one of the 12 non-performing assets (NPAs) mandated for resolution under the Insolvency and Bankruptcy Code (IBC). An amount of Rs 2,875 crore resolution plan submitted by AION and JSW Steel was approved by the National Company Law Tribunal (NCLT) on end of July 2018.
The present integrated operations are shut and the company acquired by AION and JSW steel is looking to start integrated steel operations at the time when the steel demand has started to pick up.
Mr. Seshagiri Rao, JSW Steel joint MD and group CFO said, “We have completed the expansion of pellet plant to 2.4 million tonnes and we are also starting the integrated steel operations next month. So things should look better for Monnet.”
Earlier in October, Monnet Ispat had informed the stock exchanges that it would be undertaking modification of its plant and machinery for manufacturing special steel products. The period of shutdown which was declared to take effect from June 21, got further extended and its integrated operation was expected to resume in Q4 FY20 after completion of the modification.
However, operations at Raigarh pellet plant started in October and production was ramped up to around 90 percent of the installed capacity post-acquisition of management control.
The steel market weakened towards the end of last year. The finished steel consumption which grew at a rate of 10.3 percent in Q2FY 2019 came down to 3.1 percent in Q2FY2020 and so does the steel price which fell from Rs 46,000 per tonne in November 2018 to Rs 32,500 recently. But the last two months have shown recovery with steel companies increasing the prices by Rs 1,000 per tonne both in October and November respectively and Monnet is eyeing a turnaround this year.
