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Odisha to stay away from Bhushan Steel bid

Tata Steel and ArcelorMittal also are expected to make a bid for Bhushan Steel

Dev Chatterjee & Abhijit Lele  |  Mumbai 

Bhushan, Essar lenders to tap global investors

The government has decided to stay away from the sale of Steel, which is one of the first 12 identified by the (RBI) for insolvency and is slated to receive bids on December 23 from rival Chairman Rajnish Kumar said the bank had not received any reply to its proposal to the government to take a 26 per cent stake in the company. “We have not received any response from the government,” Kumar has told Business Standard. As Steel’s plant is located in Odisha, the bank had requested the state government to pick up a stake. Steel and Power and Steel have been sent to the National Company Law Tribunal (NCLT) for resolution under the Insolvency and Bankruptcy Code (IBC) after they had defaulted on a combined debt of Rs 87,000 crore. Steel is the biggest non-performing asset among the 12 stressed that were sent to the NCLT for resolution by the RBI in June this year. JSW Steel would be making bids for both the but is keen to acquire Steel, which has a production capacity of 5.6 million tonnes per annum (mtpa). JSW Steel is tying up with JFE of Japan to bid for the Odisha-based company, which has a debt of Rs 49,957 crore as of March this year.

It is also in talks with private equity to join its bid. and also are expected to make a bid for Steel. Power and Steel has an integrated 3.5-mtpa steel plant with net sales of Rs 7,699 crore and a debt of Rs 37,248 crore as of March last year (see chart). The bids for Power and Steel are expected on December 22. JSW, along with AION Capital, is the only bidder for Monnet Ispat. Banks are expected to take up to a 60 per cent haircut on their exposure to these stressed and will have to make 50 per cent provisions for these loans in the current quarter itself. The RBI had directed banks in June to file 12 cases as part of its first list (of which 11 cases have been admitted), and has suggested another 28 cases to be referred to the NCLT by the end of December if they are not resolved by other means.

First Published: Fri, December 15 2017. 00:53 IST
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