L G Balakrishnan and Bros Ltd's resolution plan to acquire RSAL Steel Pvt Ltd approved by NCLT

The Hon'ble National Company Law Tribunal, Mumbai Bench ("NCLT"), vide its order dated 09.01.2024 has approved the resolution plan submitted by M/s L.G Balakrishnan & Bros Limited ("LGB") for acquiring 100% of the share capital of M/s RSAL Steel Private Limited ("RSAL") pursuant to the Corporate Insolvency Resolution Process ("CIRP") under the Insolvency and Bankruptcy Code 2016 ("IBC").

The closing of the transaction is yet to take place and we are in process of implementation of the resolution plan in terms of the schedule stated in the resolution plan and as approved by NCLT.

As per the Order of the NCLT, LGB will close the transaction within the time period specified in theresolution plan and will take control of the operations of RSAL thereafter.

M/S. RSAL Steel Private Limited (CIN:U28990MH2010PTC2l1581), a Company Limited by Shares having paid up Share Capital of Rs. 59,49,87,000/- and having its registered office address at 611, Tulsiani Chambers, Nariman Point, Mumbai, MH 400021.

The Total turnover of RSAL as per the audited financial statement for 2018-19 was Rs.58.51 crores and total profit/ (loss) for the 2018-19 financial year was (32.53 crores).

LGB is the largest manufacturer of drive chains / timing chains used in two-wheeler and four-wheeler applications and uses about 10,000 tons of steel of various types, out of which about 6,000 tons is CRCA type per year.

RSAL is primarily engaged in the manufacturing of cold rolled close annealed (CRCA) strips which constitute a large portion of the raw materials for manufacturing these chains which is helpful for its captive requirement.

RSAL is being acquired on a going concern basis for a price of Rs. 24 crores to be paid to financial and operational creditors pursuant to the resolution plan and equity infusion of Rs. 10.00 lakhs in RSAL. Total financial outlay, including costs of resolution process is Rs. 35.10 crores.

Shares of LG Balakrishnan & Bros Limited was last trading in BSE at Rs. 1320.20 as compared to the previous close of Rs. 1294.85. The total number of shares traded during the day was 1191 in over 132 trades.

The stock hit an intraday high of Rs. 1323.70 and intraday low of 1262.15. The net turnover during the day was Rs. 1557414.00.

Source : Equity Bulls

Keywords

LGBalakrishnanandBros INE337A01034 ResolutionPlan NCLT Approval RSALSteel