Electrosteel Steels, which is undergoing insolvency resolution process, has allotted equity shares to its lenders pursuant to conversion of loans worth about Rs 7,400 crore.

The company has allotted nearly 740 crore equity shares to 26 lenders, out of which the country’s largest lender State Bank of India got 271,61,79,203 equity shares.

“The company has issued and allotted 7,399,132,055 equity shares of Rs 10 each on a preferential/private placement basis to financial creditors of the company...pursuant to conversion of loan equivalent to Rs 73,991,320,550 in terms of resolution plan approved by the National Company Law Tribunal- Kolkata Bench,” Electrosteel Steels said in a regulatory filing today.

The company had yesterday spelled out steps to be taken for the completion of its takeover by Vedanta Star Ltd and subsequent delisting from stock exchanges.

In a filing to the BSE, it had said that since the liquidation value of the company as determined by the resolution professional is not sufficient to cover the debt of financial creditors in full, the liquidation value of the company in the hands of equity shareholders is nil.

However, it added that “as per the resolution plan, the shareholder of the company will be paid Rs 0.19 per equity share they hold as on date (pre-capital reduction price).

“On completion of Transaction Steps, Vedanta Star Ltd will make the delisting offer to the then shareholders of the company. The equivalent per share exit price post completion of Transaction Steps is Rs 9.54 per equity share (post-capital reduction price),” Electrosteel Steels said.

In March, Vedanta was declared as a successful resolution applicant by the committee of creditors (CoC) for Electrosteel Steels Ltd under the Corporate Insolvency Resolution Process of the Insolvency and Bankruptcy Code, 2016.

Vedanta Ltd had earlier this week deposited an upfront amount of Rs 5,320 crore in the escrow account of Electrosteel Steels Ltd.

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