JSW Steel seeks ₹19,300 cr refund after SC cancels BPSL acquisition

Earlier this month, the Supreme Court cancelled JSW Steel's 2019 acquisition of BPSL, saying there were several non-compliances. The court also ordered that BPSL should be liquidated

JSW Steel has sent demand notices to banks asking for a refund of the money it paid as part of its ₹19,300-crore resolution plan for Bhushan Power and Steel, The Economic Times reported citing sources familiar with the development. The company has also asked for the liquidation process to be delayed by 60 days.

 

Earlier this month, the Supreme Court cancelled JSW Steel’s 2019 acquisition of Bhushan Power and Steel (BPSL), saying there were several non-compliances. The court also ordered that BPSL should be liquidated.

 

Sources said the refund demand follows the directions of the Supreme Court. JSW Steel is exploring legal options and wants more time before any action is taken on the company. Many believe JSW Steel may soon file a review petition against the court’s decision. 

   

The National Company Law Tribunal (NCLT) will carry out the liquidation. However, the committee of creditors (CoC) has the power to appoint the liquidator and monitor the process. In its May 2 decision, the Supreme Court referred to earlier cases that showed what steps to take if a resolution plan is not accepted.

 

Court asks to refund the money

 

In its ruling, the top court said, “The upfront payment amount shall be refunded by the CoC (committee of creditors) to the resolution applicant, JSW, within the time period provided for in the March 6, 2020, order… the ownership, control and possession of the corporate debtor will be handed back by JSW to the financial creditors.”

 

At the time, the creditors told the court they would return the money within two months if JSW’s plan was rejected.

 

According to the media report, Bhushan Power and Steel had total debts of over ₹45,000 crore when it entered insolvency. JSW Steel’s offer was the highest bid made to rescue the company. Even though legal cases were going on, including one from BPSL’s former owner Sanjay Singhal, the payments were still accepted.

 

NCLT had first approved JSW Steel’s plan on September 5, 2019. The National Company Law Appellate Tribunal (NCLAT) confirmed this decision on February 17, 2020. However, the final date for implementing the plan was shifted to March 31, 2021.