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Tatas complete acquisition of controlling stake of 72.65% in Bhushan Steel

The investment from BNPL in Bhushan Steel has been done through a combination equity of Rs 1.58 billion and inter-corporate loan of Rs 349.73 billion

Ishita Ayan Dutt  |  Kolkata 

Bhushan Steel

on Friday said its wholly-owned subsidiary (BNPL) had completed the acquisition of a controlling stake of 72.65 per cent in Bhushan Steel, making it the first of the 12 Reserve Bank of India-recommended to be resolved under the (IBC).

The government lost no time in celebrating its success. Piyush Goyal, who has been given the temporary charge of the finance ministry, tweeted: “Congrats to PM @narendramodi ji & @arunjaitley ji for a historic breakthrough in resolving legacy issues of banks. Lenders recovered almost entire principal loan of through Rs 36,400 cr (Rs 364 billion) transparent bid by and also got 12% stake in the company.”

He also said the liquidation value of was Rs 145.41 billion but creditors received almost four times the amount. This was possible due to a “robust and transparent” IBC, he added.

Secretary Rajiv Kumar said it was a historic day as banks recovered Rs 325 billion from the sale of to the Tatas under the Banks would gain from the writeback, he said, adding that 53 lenders, domestic and international, had recovered Rs 352 billion.

Bhushan Steel will add 5.6 million tonnes (mt) of crude steel capacity to Tata Steel’s existing 12.7 mt. The company has downstream facilities of cold rolled products of around 2 mt. The upstream facilities are in Meramandali (Odisha) and downstream in Khopoli (Maharashtra) and Sahibabad (Uttar Pradesh). Bhushan mainly caters to the automobile and consumer durables manufacturers.

The shares were subscribed by through primary subscription, which has been done at the face of Rs 2 a share.

The admitted cost and employee dues have been paid and the settlement of the amount equivalent to Rs 325 billion towards financial creditors of Bhushan Steel was being undertaken as per the terms of the and corresponding transaction documents, the company informed the stock exchanges.

The firm also said Rs 12 billion would be paid to the operational creditors of Bhushan Steel over a period of 12 months as per their admitted claims and as per the terms of the approved

The investment from in Bhushan Steel has been done through a combination equity of Rs 1.58 billion and inter-corporate loan of Rs 349.73 billion. Additionally, Rs 1 billion has been paid by to the financial creditors of Bhushan Steel as consideration for the remaining financial debt.

Pursuant to the acquisition, the nominees of have been appointed on the board of Bhushan Steel and the existing directors of Bhushan Steel are deemed to have resigned from its board as per the terms of the approved resolution plan, Tata Steel said.

THE FINE PRINT

  • Investment from BNPL in Bhushan Steel has been done through a combination equity of Rs 1.58 bn and inter-corporate loan of Rs 349.73 bn
  • Fifty-three lenders — domestic and international — have recovered almost the entire principal loan of Rs 364 bn
  • Lenders have also got a 12 per cent stake in Bhushan Steel

First Published: Sat, May 19 2018. 01:16 IST
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