After over three years of bankruptcy, Bhushan Power and Steel has been bought by JSW Steel for $2.7 billion (Rs 19,350 crore).
This would mean a shortened dirty dozen list originally drawn up by the central bank as well as a substantial recovery for lenders before the fiscal year ending March 31.
Bhushan Power, one of India’s most indebted large companies, was among the first 12 companies referred by the Reserve Bank of India (RBI) to the bankruptcy tribunal in June 2017.
JSW Steel had outbid two rivals—Tata Steel Ltd and the UK’s Liberty House Group—to acquire the firm.
Earlier this month, the lenders okayed the deal.
The National Company Law Tribunal had first approved the transaction in September 2019.
However, the high-profile deal got stuck since then, pending investigations into fraud and money laundering allegations against the former owners of the bankrupt firm.
The resolution plan means a haircut of almost 60% for the lenders. JSW Steel would pay additional Rs 350 crore to operational creditors against their admitted claims of Rs 700 crore.
State Bank of India will recover around Rs 4,000 crore against admitted claims of Rs 9,825 crore. Punjab National Bank and Canara Bank will get about Rs 4,400 crore and Rs 2,250 crore, respectively.
With this acquisition, JSW Steel will get an integrated steel unit with liquid steel capacity of more than 2.5 million tonnes per annum in Jharsuguda, Odisha. It will also take over two downstream facilities based in Kolkata and Chandigarh.
The acquisition will help the JSW Group firm to establish its presence especially in flat steel business in the eastern region of India.
Incorporated in 1999, Bhushan Power produces billets and hot and cold-rolled coils.
The company had defaulted on claims worth over Rs 47,880 crore and was dragged to the insolvency tribunal in July 2017.
The annual turnover as on March-end 2020 stood at Rs 8,635 crore, lower than Rs 9,112 crore a year ago. For the year ended March 2018, it was Rs 7,790.90 crore.
