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The National Company Law Tribunal (NCLT) has approved JSW Steel’s bid of Rs 19,700 core for Bhushan Power and Steel. The tribunal has said that the winning bid of JSW Steel will be binding on all parties. The order further states that profits generated during the pendency of the case are to be distributed between creditors as per the Essar Steel judgment of the NCLAT.
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The NCLT also slapped a fine of Rs 1 lakh on Bhushan Power & Steel’s promoter, Sanjay Singal.
Bhushan Power and Steel (BPSL) operates 3.5 mtpa steel plant in Odisha and has an accumulated total debt of Rs 47,000 crore. BPSL was one of the 12 companies that had been pushed into the IBC by the RBI. In the first round of bidding Liberty House had submitted a bid of Rs 18,500 crore, Tata Steel had submitted a bid of Rs 17,000 crore while JSW Steel had submitted a bid of Rs 11,000 crore. JSW Steel later revised its bid higher to Rs 19,700 crore.
Tata Steel had challenged JSW's revised bid in NCLAT but this plea was dismissed in February this year and JSW Steel was declared the highest bidder by the Committee of Creditors (COC) in February itself.
NCLT had reserved its judgment on approving the JSW Steel bid of Rs 19,700 crore in April 2019. It’s noteworthy that JSW Steel has already acquired insolvent steel company Monnet Ispat and Energy in 2018.
State Bank of India (SBI) has the highest exposure in Bhushan Power followed by Punjab National Bank (PNB) and Assets Care & Reconstruction Enterprise (ACRE). The JSW Steel scrip slipped after the order came out as acquisition in this market is not being seen very favourably and closed the day’s trade flat at Rs 216.50 per share.
First Published: Sept 5, 2019 3:28 PM IST