INSUBCONTINENT EXCLUSIVE:
Tata Steel has formally taken control of Bhushan Steel, settling about Rs 35,200 crore, or nearly two-thirds, of the loans the bankrupt
steelmaker owed to lenders and appointing three nominees on its board.
Bhushan Steel is the first to emerge successful from insolvency and
bankruptcy process among the initial dozen big defaulters that the central bank referred for resolution under a law enacted for quick
recovery and settlement of stressed assets.
Banks, which though have taken a more than 37% haircut on their outstanding loans of Rs 56,079
crore to Bhushan Steel, can now classify the assets as standard, reducing their bad loan burden
They are likely to reverse the provisions they had made against the account, significantly boosting their first-quarter results
State Bank of India had the highest exposure of Rs 12,872 crore to Bhushan Steel, followed by Punjab National Bank at Rs 4,904 crore and
72.65% stake in Bhushan Steel, while lenders will own 12.27% in it and the balance will be held by existing shareholders.
The board of
Bhushan Steel has inducted three senior executives of Tatas.
The existing directors, including promoters Brij Bhushan Singhal and Neeraj
Singhal, will have to resign with the change in ownership.
The three Tata nominees are Dibyendu Dutta, group head-MA and treasury at Tata
Steel; Anand Sen, president TQM (total quality management) and steel business at Tata Steel; and Rajeev Singhal, who is a director at
and Neeraj Singhal.
LT moved the bankruptcy court seeking full compensation against its claims of Rs 900 crore from Bhushan Steel
Singhal moved the National Company Law Appellate Tribunal objecting to the Tatas acquiring Bhushan Steel
looking forward to working with all stakeholders and the community to build a sustainable future for BSL
But it can easily be taken from 5 mt to 8 mt, he added
Tata Steel said the investment from Bamnipal Steel in Bhushan Steel has been done through a combination of equity of Rs 158.8 crore and
intercorporate loans of Rs 34,973.6 crore
Bamnipal has paid another Rs 100 crore to creditors of Bhushan Steel
Further, as per the terms of their resolution plan, Rs 1,200 crore would be paid to operational creditors over a period of 12 months.
The
acquisition of Bhushan Steel is being financed through a combination of external bridge loan of Rs 16,500 crore availed of by Bamnipal Steel
and the balance amount through investment by Tata Steel
The bridge loan will be replaced by longer-term debt over a period of time, the company said.
