JSW Steel's $2.7-billion buy of Bhushan Power & Steel faces legal test

JSW Steel’s $2.7-billion purchase of a bankrupt steel mill is facing a fresh hurdle after a former chairman of Bhushan Power & Steel challenged the deal in the country’s top court.

Sanjay Singal filed a petition on Monday against a ruling by a bankruptcy tribunal that had approved the deal earlier this month, according to the Supreme Court’s website. The petition hasn’t yet been allotted a date for a hearing. A JSW spokesman declined to comment.

Bidders for bankrupt steel mills have faced repeated delays in buying indebted assets. The Sajjan Jindal-led mill has been caught in legal tangles since its Rs 19,700 crore ($2.7 billion) bid for Bhushan Power was first approved last year, while ArcelorMittal faced a year-long battle for its takeover of Essar Steel India.

Singal’s plea threatens to delay or derail the takeover. An adverse ruling could also be a setback for lenders, which led by PNB, are seeking a speedy resolution.