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Bhushan Steel Sale
The National Company Law Appellate Tribunal (NCLAT) today upheld the sale of Bhushan Steel to Tata Steel, rejecting allegations of its ineligibility by the promoters of the debt-ridden firm. The appellate tribunal also rejected the claims of engineering and construction major L&T, an operational creditor of Bhushan Steel Ltd, opposing Tata Steel's resolution plan seeking a higher priority in debt resettlement. An NCLAT bench headed by Chairman Justice S J Mukhopadhaya rejected the claims of its promoters Neeraj Singal that Tata Steel was ineligible to bid for Bhushan Steel under section 29 A of the Insolvency & Bankruptcy Code (IBC). The appellate tribunal said that Tata Steel UK, a foreign subsidiary of Tata Steel, which was fined by an English Court in February 2018 under UK Act, had a provision of imprisonment for a term not exceeding twelve months, or a fine, or both'. While, the provision in section 29A (d) of IBC, which deals with eligibility, stipulates has been ...
Sale of debt-laden Bhushan Steel, which is one of the largest non-performing assets in the country, is credit positive as it will help improve banks' asset quality metrics and set precedent for resolution of other non-performing assets, particularly in the steel sector, Moody's Investors Service said today.On Wednesday, Tata Steel via exchanges informed that it has emerged as the highest bidder to acquire controlling stake in Neeraj Singhal-promoted Bhushan Steel which is undergoing a resolution under India's 2016 Insolvency and Bankruptcy Code. Tata Steel did not disclose the final purchase price or the transaction's terms and conditions.Nevertheless, based on media reports, the purchase price could result in a haircut of around 25 percent for the lenders to Bhushan Steel, said Moody's. The Reserve Bank of India has asked banks to provide a minimum of 50 percent of their respective loan amount for the account by March 2018. As such, a haircut of less than their provisioning cover ...