Sajjan Jindal-controlled JSW Steel has made the highest bid for Bhushan Power & Steel in the second round of bidding for the asset in going through the insolvency process. The bids were opened on Tuesday.
JSW’s revised offer stands at Rs 193.5 billion, up from Rs 110 billion submitted in February. Bhushan Power owes its lenders around Rs 470 billion.
Tata Steel, which had been selected as the highest qualified bidder twice over in the first round, kept its offer unchanged at Rs 166 billion, but improved the payout to operational creditors from Rs 1 billion to Rs 5 billion.
Liberty House, too, kept its offer unchanged at Rs 185.9 billion, but improved the amount payable to operational creditors from 20 per cent to 50 per cent. Sources close to Liberty House said some concerns of Bhushan Power and Steel’s committee of creditors were addressed on Tuesday.
Representatives of the three bidders — Tata Steel, Liberty House and JSW Steel — as well as operational creditors were present at Tuesday’s meeting of the CoC, according to a National Company Law Appellate Tribunal (NCLAT) order.
The bids will be evaluated by process advisors and lenders will submit their observation to the NCLAT on August 16. The next date of hearing in NCLAT is August 17. But lenders do not believe that the case is resolved as yet. Tata Steel had challenged the rebid in the NCLAT and the Supreme Court (SC).
However, if JSW Steel finally wins Bhushan Power, it would give the company a toehold in the east. Bhushan Power has a 3 million tonne of steelmaking capacity, which JSW believes can be ramped up to 5.5 million tonnes at a nominal cost. Industry sources said, JSW made an aggressive bid for Bhushan Power to retain its leadership position in the domestic market.
JSW Steel’s current capacity is around 18 million tonnes. It recently acquired Monnet Ispat & Energy, which has capacity of 1 million tonne, with AION, under the Insolvency and Bankruptcy Code (IBC) proceedings. JSW Steel’s number one position was under threat from Tata Steel, which was close after the acquisition of Bhushan Steel, an asset that was contested by the two steel makers.
Having lost Bhushan Steel, JSW Steel decided to go for Bhushan Power, at any cost. “The funding was already in place for Bhushan Steel,” said sources close to development.
Later, the NCLAT decided to allow revised bids, but Tata Steel moved the SC. In light of the SC hearing on August 10, the NCLAT shifted the deadline for revised bids to August 13.