The Chennai Bench of India’s National Company Law Tribunal (NCLT) has invited bids for the e-auctioning of assets of SBQ Steel on July 21. The company is being liquidated under India’s insolvency code.
SBQ Steel will be auctioned for the fourth time after the previous bidder backed out citing changed market conditions in view of the COVID-19 pandemic. The third auction was held in January 2020. The company was referred for corporate insolvency proceedings by one of its lenders the Union Bank of India in 2017. UK-based metals major Liberty House Group had expressed interest in the company, but lenders decided against the deal. In 2019, NCLT ordered the liquidation of SBQ Steel as no revival plans were disapproved by its lenders.
SBQ has an integrated steel plant in Nellore, Andhra Pradesh with an annual capacity to produce more than 250,000mt of finished steel. The facility includes special quality alloy steel plant and 90 MW power plant. The coke-to-steel plant has two coke oven batteries, a mini sinter plant, four DRI units and a 250cubic meter mini blast furnace and continuous automatic type rolling mill. The company’s melt shop has a 50t EAF and has leased a 40t induction furnace with 130,000mt capacity in 2017. The company manufactured square billets, blooms and value-added products (bars and rods) for construction, infrastructure and auto sectors.
SBQ shut operations in 2013 after facing working capital challenges amid a slack in the steel market. The company owes around Rs4.35bn ($578.46mn) to creditors. The reserve price for the fourth auction is Rs2.18bn ($29.08mn), down by 10pc from the previous auction.
($1=Rs75.20)