Bhushan Steel's buyout to reduce PSB NPAs by Rs 35000 cr

Angelo Anderson
May 21, 2018

Shares of Bhushan Steel today rose almost 5 per cent after the National Company Law Appellate Tribunal (NCLAT) declined to stay Tata Steel's acquisition of the debt-laden firm under the corporate insolvency resolution process.

To remind you, on May 15, the National Company Law Tribunal had approved Tata Steel's Rs 35,200 crore bid for BSL, with a debt of over Rs 56,000 crore.

With a current market capitalization of Rs 598 crore at the rate of Rs 27.75 per share for Bhushan Steel Ltd., the share for lenders that stands at almost 12 per cent, works out to be Rs 72 crore.

"With recovery of NPAs (non performing assets), banks will now be in a position to offer more and affordable credit to major sectors of the economy especially the MSME (Micro, Small and Medium Enterprises) sector".

"Lenders recovered nearly entire principal loan of Bhushan Steel through Rs 36,400 crore transparent bid by Tata Steel and also got 12% stake in the company", he tweeted.

Yesterday Tata Steel said it has successfully completed the acquisition of controlling stake of 72.65 per cent in Bhushan Steel Ltd (BSL) through its wholly-owner subsidiary Bamnipal Steel Ltd (BNPL). "This will boost employment and the economy even more", Goyal said in a tweet. The bridge loan availed by BNPL is expected to be replaced by debt raised by Bhushan Steel over time. "This was possible due to the robust and transparent Insolvency & Bankruptcy Code brought by this Government".

Tata Steel said on Friday it has completed the acquisition of a 72.7 per cent stake in bankrupt Bhushan Steel Ltd (BSL) for Rs35,200 crore, making the first acquisition of a stressed asset under the new Insolvency and Bankruptcy Code.

Tata Steel sees opportunities for synergy with Bhushan Steel, which it acquired under the corporate insolvency resolution process, a top company official said today.

The outstanding principle amount to a consortium of lenders was Rs 44,000 crore excluding interest. Meanwhile, banking secretary Rajiv Kumar said on Friday that the resolution process will help a total of 53 domestic and global lenders. Rs 1,200 crore will be paid to the operational creditors of BSL over a period of 12 months as per their admitted claims and as per the terms of the approved Resolution Plan. Cheque handed over. First big case fully resolved under IBC.

Other reports by Iphone Fresh

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