Bhushan Steel spurts on report of loan restructuring

Bhushan Steel rose 5.05% to Rs 63.40 at 10:30 IST on BSE on media report that the company submitted final proposal for corporate debt restructuring programme.

Meanwhile, the S&P BSE Sensex was up 21.89 points, or 0.07% to 29,728.50.

On the BSE, 1.86 lakh shares were traded in the counter so far, compared with average daily volumes of 2.08 lakh shares in the past one quarter. The stock had hit a high of Rs 65.20 and a low of Rs 63 so far during the day.

The stock hit a 52-week high of Rs 65.20 on 10 April 2017. The stock hit a 52-week low of Rs 34.50 on 24 May 2016.

The stock had outperformed the market over the past one month till 7 April 2017, rising 10.94% compared with 2.69% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 43.35% as against Sensex's 11.01% rise.

The small-cap company has equity capital of Rs 45.30 crore. Face value per share is Rs 2.

According to the media report, Bhushan Steel last month submitted final proposal for debt restructuring under the Reserve Bank of India (RBI)'s S4A scheme. S4A, or Scheme for Sustainable Structuring of Stressed Assets, was unveiled by RBI last year to make debt recasts easier.

Bhushan Steel has been in financial distress recently. State Bank of India and Punjab National Bank lead two groups of creditor banks to Bhushan Steel. As of 2015-2016, the steel maker had Rs 44477.90 crore debt on books with Rs 10000 crore being added in past three years as interest and penal interest, reports added.

Under S4A scheme, banks need to establish by a process that involves a forensic audit that the promoters are clean and not involved in any activity of malfeasance. S4A cannot be implemented if the audit report suggests problem with the promoters. In such cases where wrong doing is seen on the part of promoters, the S4A can be implemented only when there is a change in ownership.

Bhushan Steel reported net loss of Rs 734.04 crore in Q3 December 2016 as against net loss of Rs 693.60 crore in Q3 December 2015. Net sales rose 47.12% to Rs 3611.13 crore in Q3 December 2016 over Q3 December 2015.

Bhushan Steel is one of the prominent players in the Indian steel industry. It has an existing steel production capacity of 5.6 million ton per annum.

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