Calcutta HC restrains Stemcor from selling India assets

KOLKATA: The Calcutta High Court on Wednesday passed an order restraining Stemcor Holdings from selling any asset in India, following a petition filed against it by ICICI Bank, thereby throwing a spanner in the works of an imminent sale of its Indian asset.


Stemcor was in the process of selling an iron ore mine and a pellet plant in Odisha as part of a bid to pare debt of $1.2 billion. Tata Steel, Sajjan Jindal’s JSW, Naveen Jindal’s JSPL, Anil Agarwal’s Vedanta Resources were among the prominent firms in the fray to acquire the asset.

Stemcor is owned by the storied Oppenheimer family and is one of the largest metal trading firms in the UK. ICICI Bank had said London-based trading company Stemcor’s Indian assets are part of collateral for a Rs 587 crore. It said it had received "a communication from Stemcor Holding on September 13, 2013, where there is an indication that Stemcor group is exploring sale of its investment in India."

The counsel for ICICI Bank argued that "in view of the non-disposal undertaking, Stemcor is not open to transfer , assign, pledge, charge or create any lien or anyway encumber or deal with or dispose of the existing or future shareholders in the company."

Delivering an interim order, Justice Soumen Sen said the petitioner is able to make out a strong prima facie case, adding, "There shall be an order injunction restraining the respondents from transferring , assigning, disposing , pledging or creating any change or lien or in anyway encumbering or dealing with or disposing of their existing shareholding in the company in favour of any person."

The court’s interim order of September 19, 2013 was published on its website on Wednesday. The next date of hearing is October 7. Last Friday, Stemcor, which failed to repay a $900 million loan globally in May, said it has signed a new standstill agreement with its lenders that extends through to the end of the year.

During this period, the group expects to conclude its restructuring discussions regarding $1.25 billion of syndicated loans. When contacted, a spokesperson of ICICI Bank said the bank did not want to comment on it. Stemcor owns the Odisha 5-mt mine and the 4-mt pellet plant through units Aryan Mining & Trading and Brahmani River Pellets.