A Cayman Island-based fund will be the new owner of steel rolls maker Gontermann-Peipers (India) Ltd after the Supreme Court cleared a bid for the Calcutta-based company.

Howen International Fund SPC had bid Rs 127.75 crore for GPIL which has its manufacturing unit on Diamond Harbour Road near Joka. Once belonging to Pramod and Vinod Mittal — the younger siblings of steel magnate Lakshmi N. Mittal — the assets of GPIL were auctioned under the liquidation process as a ‘going concern’ basis.

Not much is known about the new owner which participated in the second auction for GPIL and left other bidders, including Sajjan Jindal’s JSW Group, behind by a long shot.

The fund is managed by Dubai-based financial service company Almas Capital Limited. Howen Fund is in the segregated portfolio company (SPC) structure and invests in companies through debt or equity, according to the Almas website. Sources said it is owned by a person of Indian origin.

SPC structure, popular among funds, is a Cayman Island-construct where the assets and liabilities of a segregated portfolio are ringfenced from the assets and liabilities of other segregated portfolios within SPC. However, these assets remain part of a single company.

While the SC verdict last week brought closure to the corporate insolvency resolution process which started in December 2019, questions remain if the plant and the manufacturing operation would be revived.

The 462-odd workers and officers of the DH Road plant are hoping that the new owner spells out their strategy soon. “We are hopeful the new owner would restart the plant,” Rahul Roy Choudhuri, an officer of GPIL who represented the employees’ interest in the tribunal and the SC, said. He pointed out that GPIL was auctioned as a ‘going concern’ which ties the successful bidder to the commitment of reviving the plant.

Legal sources indicated that the successful bidder will be making an application before the National Company Law Tribunal (NCLT), Calcutta bench detailing a plan for the future, after making the full payment.

It has so far paid Rs 93.4 crore of the Rs 127.75 crore bid amount and the SC has granted time till April 30 to make the balance payment.

Auction replay

The first round of auction of the maker of rolls — which is used by steel makers — took place in September 2021, when a consortium of Calcutta-based realtor Srijan Realty and secondary steel producer Shakambhari Group emerged as the highest bidder with a Rs 88-crore offer.

The auction was subsequently litigated by other suitors, including JSW Steel, leading to the order of reauction by NCLT, Calcutta. The order was challenged by consortium Snaefell Heights LLP at National Company Law Appellate Tribunal, which upheld the lower tribunal order of re-auction on the ground of ‘material irregularity’. Even though Snaefell again challenged the order in the SC, it did not stop the auction — where Howen emerged on top, offering to pay 50 per cent more than previous highest offer.

“Since the company law tribunal is also concerned about the realisation of the maximum value by the sale of assets, we are of the view that the auction now conducted should be confirmed without going into the other details,” a bench of Justice V. Ramasubramanian and Justice Pankaj Mithal, said in the order.

The court also ordered that the previous bidder will be refunded the deposit of Rs 88 crore, along with a 12 per cent interest, which works out to be around Rs 14 crore.

“The observations made against the liquidator about the procedural irregularities in the conduct of the action shall stand expunged,” the bench further ordered.

Raj Singhania, the liquidator, expressed his satisfaction with the verdict. “The allegation of material irregularity casted upon me has now being expunged by the Hon’ble Apex Court and the asset also has fetched a good price, which is double the liquidation value, for the creditors. I am happy with the verdict,” he said on Sunday.

With the legal issues now behind, it would now remain to be seen if the once premier steel roll maker, which was set up by the Germans in 1968, regains its prime.