Varanasi-based Sanrachna Group, which is into construction and real estate development, has become the new owner of the troubled Aussie mining company, India Resources, which has been operating Hindustan Copper's mine in Surda.
Owned by architect Anurag Kushwaha, Sanrachna has acquired India Resources through its Australian arm Avidsys Pty Ltd which is into mining and commodity trading with the presence in US and Russia.
Following a decade-long dispute between the state-owned sole copper mine owner and its Australian contractor, India Resources had turned sick and went to the administrator in a process similar to Indian government's effort to find buyers for stressed assets by appointing resolution professionals at National Company Law Tribunal.
After erosion of most of its worth, the deal for India Resources has been valued at about AU$4 million or about Rs 20 crore paving the way for settlement of dues worth about Rs 40 crore with most of the creditors, including lender Axis Bank, earlier agreeing to haircut, Arvind Mishra, former managing director of India Resources, told DNA Money.
Axis Bank, which would be paid AU$1 million, would suffer a haircut of more than 50%, Mishra said.
There is a catch though as the agreement to acquire the company is conditional upon India Resources getting back the mining contract for the Jharkhand mine.
But with the mine now being operated by Shriram EPC and Hindustan Copper aggrieved by the Australian company's exit, that condition might not get fulfilled.
Apart from the haircut, which is roughly about 50% for most of the debtors, the cost had been heavy for Australian investors who had bet on the opening up of mining and natural resources sector in India to foreign investors.
"Our AU$40 million Foreign Direct Investment created 1500 jobs and contributed AU$140 million to Indian government with profits and taxes, yet our Australian shareholders have lost it all," lamented Mishra.
While areas of disputes between Hindustan Copper and India Resources were many, the last trigger for the Aussie company calling off its contract was Hindustan Copper's refusal to reimburse doubling of minimum wages by the Indian government in early 2017.
"There were violent strikes by the workers which stopped operations. It wasn't possible to run the operations in a sustainable way if we had to shoulder the burden," Mishra said.
DIGGING DEEPER
- The deal for India Resources has been valued at about Rs 20 cr
- It will pave the way for settlement of dues worth Rs 40 crore
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