By Our Correspondent
BHUBANESWAR: The Sajjan Jindal led JSW Steel , which wrecked havoc in the last concluded bidding for expired mines in Odisha’s Keonjhar-Sundargarh mining belt, and successfully got lease of 4 major Iron Ore blocks under Joda-Koira circles of Odisha, has come under scanner following reports of irregularities in Bank loan released to the Steel maker.
A report published in www.legallyindia.com, said according to Khaitan & Co, Bank of Baroda extended financial assistance to JSW Steel “in the form of term loan for a sum not exceeding of INR 1294.65 crores and bank guarantee facility for a sum not exceeding INR 1000 crores for the purpose of financing the upfront payment obligations of JSW under the tender documents as a preferred bidder for acquisition of mining lease pertaining to Ganua Block for Iron Ore, the Jajang Block for Iron Ore, the Narayanposhi Block for Iron and manganese and the Nuagaon Block for Iron Ore, in Odisha”.
Khaitan & Co advised Bank of Baroda led by a team of partner Manisha Shroff and principal associate Smita Jha represented the client on the transaction. partner Shivanshu Thaplyal also assisted on the mining laws related queries on the transaction.
The term loan facility of INR 1294.65 crores and the bank guarantee facility of INR 1000 crores have been provided to JSW for making upfront payment for the acquisition of the Mines and furnishing the relevant performance / payment guarantees under the tender documents and some other payments to be made with respect to the acquisition and development of the Mines.
Majority parts of the Mines are over forest land over which mortgage cannot be created by JSW under applicable laws. Hence the security package had to be structured in a manner to maximize value for the lenders while continuing to comply with the restrictions on creation of mortgage over forest land.This deal has not been reported by any mainstream media outlets at the time of going to press and is based on the information supplied in a law firm’s press release, it said.
