You are here: Home » Companies » News
Business Standard

Debt-laden Bhushan Steel's stock rises 16% on JSW takeover reports

Bhushan Steel has a debt of around Rs 440 billion

Dev Chatterjee & Ishita Ayan Dutt  |  Mumbai\Kolkata 

Bhushan Steel
Bhushan Steel

Bhushan Steel shares rose 16 per cent during intra-day trade on the Bombay Stock Exchange (BSE) on Tuesday, with punters betting that Steel had submitted a higher bid for the company, compared to the Tatas. The stock, however, gave up some gains and finally ended up 14 per cent at Rs 50.85 on the BSE.

Steel's bid document, which ran into 500 pages, was opened at Deloitte's Gurugram office along with two others from and employees of Bhushan Steel.

Neeraj Singal, the promoter of Bhushan Steel, also submitted a bid, but it was not opened. According to sources close to the development, Singal's bid was not considered because it was not legally tenable. An amendment to the (IBC) last November barred promoters from bidding for stressed unless they cleared their over dues before submitting a resolution plan. Singal had not cleared the over dues.

Lenders said the bids by both parties would have to be evaluated because there were too many conditions attached to the bids by both Steel and

The liquidation value for Bhushan Steel was Rs 150 billion, and it was believed that the upfront payment for the highest offer was around Rs 200 billion.

Bhushan Steel has a debt of around Rs 440 billion.

The company has a steel-making capacity of 5.6 million tonnes in Odisha. For Steel, if it bags Bhushan Steel, it would mean a significant presence in the east. is a strong player in both west and south. For Tata Steel, it would mean synergies with its plant in Kalinganagar. Additionally, has mines in Odisha and it can transport the finished product to elsewhere in the country and save on the transportation cost of raw material.

Bhushan Steel is the third stressed steel asset where lenders are in the process of evaluating bids. Steel has already won Monnet Ispat & Energy, while Vedanta has emerged the highest bidder for Electrosteel Steels.

First Published: Tue, February 06 2018. 22:40 IST