Tata Steel Ltd has won the race to acquire another insolvent company, with the National Company Law Tribunal (NCLT) approving the alloy maker’s Rs 805 crore ($115.4 million) bid to take over Bhushan Energy Ltd.
Delhi-based Bhushan Energy will be Tata Steel’s second acquisition of a distressed asset from Neeraj Singal and his family. The Tata Group company had bought Bhushan Steel Ltd (now Tata Steel BSL Ltd) in May last year for Rs 35,200 crore through the Insolvency and Bankruptcy Code (IBC) route.
Tata Steel’s bid for Bhushan Energy was approved by the principal bench of the NCLT in Delhi on Thursday. While approving Tatas’ bid, the tribunal rejected Singal’s objections. A detailed order on the matter is awaited.
Bhushan Energy was previously a subsidiary of Bhushan Steel and was incorporated in 2005. It is based in Dhenkanal, Odisha.
Under the resolution plan for Bhushan Energy’s acquisition, Tata Steel will make an upfront payment of Rs 730 crore. It will also pay Rs 50 crore to operational creditors, a banker said, confirming the development. Tata Steel will also infuse Rs 367 crore into the company as equity capital.
Bhushan Energy has a debt of around Rs 4,000 crore. It was admitted to the insolvency court on January 8 last year on a petition filed by State Bank of India.
In June, the NCLT had extended the insolvency resolution period for 90 days as per the IBC mandate after the creditors failed to find a suitable buyer within the initial period of 180 days.