ASPL incorporated a wholly-owned subsidiary – Arjas Modern Steel Pvt Ltd (AMSPL) on November 12 to enter into a definitive slump sale agreement with MSL.
The management expects the acquisition to be completed by March 2021, subject to the required approvals.
MSL, incorporated in 1974, operates a 150,000 ton (t) manufacturing facility at Mandi Gobindgarh for low-alloy and carbon steel-rolled products. The company, listed on BSE, primarily caters to the auto industry.
MSL’s accounts with lenders have become non-performing assets; however, its manufacturing facility is operational and has no technical issues.
The transaction is on a slump-sale basis and according to the agreement, the existing dues of MSL’s financial creditors will be settled through the sale proceeds and ASPL will not assume any existing borrowings of MSL. The key approvals awaited are from MSL’s financial creditors and the National Company Law Tribunal.
The acquisition purchase consideration, of ₹86 crore, is to be paid by ASPL via AMSPL upfront in cash.
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