Modern Steels to sell Entire Operations to ADV
Modern Steels Ltd is in advanced discussions to sell its entire operations on a slump sale basis to Asian private equity firm ADV Partners. The transaction is expected to be worth ₹120-130 crore and is likely to close this month, said the people cited above, requesting anonymity.
Chandigarh-based Modern Steels manufactures special and alloy steel and was classified as a non-performing asset (NPA) in 2018 by its lenders State Bank of India, Canara Bank and Punjab National Bank (PNB) in 2018. Subsequently, the first two lenders sold their outstanding debt to Edelweiss’s asset reconstruction arm. PNB still retains its exposure to the company.
The promoters are talking to two to three investors for a settlement, but ADV is ahead in the race. For ADV Partners, this will mark its second acquisition of a steel company in India. In January 2019, the PE firm bought out Gerdau Steel India from Brazilian conglomerate Gerdau SA for $120 million. Gerdau India has since been renamed Arjas Steel and operates a 300,000-tonne special steel plant in Tadipatri, Andhra Pradesh, besides two captive power plants.