JSW may not pursue Essar Steel if it wins Bhushan Power
JSW Steel Ltd may not pursue its interest in buying out bankrupt Essar Steel if it wins the stressed Bhushan Power and Steel Ltd instead, said two people close to the development. According to a few members of Bhushan Power and Steel’s committee of creditors (CoC) that Media spoke to, bankers are overwhelmingly in favour of JSW Steel’s offer for the stressed plant.
One banker that Media spoke to, who did not wish to be named because the voting results are not yet public, said that JSW Steel’s offer of ₹19,700 crore for the stressed plant has won the approval of more than 67% of the voting CoC members, the minimum threshold that the winning resolution plan should cross.
The final decision can only be announced by the National Company Law Appellate Tribunal (NCLAT), but banks are keen to go with the highest offer, the banker said.
Bhushan Power and Steel, under its earlier promoter Sanjay Singhal, had accumulated debts of over ₹47,000 crore until it was forced into bankruptcy under the Reserve bank of India’s (RBI’s) first “dirty dozen” list of NPA accounts.
In the initial round of bidding, Bhushan Power and Steel had got bids of ₹11,000 crore from JSW Steel, ₹17,000 crore from Tata Steel and ₹18,500 crore from Liberty House.
JSW Steel had subsequently revised its bid to ₹19,700 crore, which has now won the lenders’ approval.
“This is a much better strategic fit for JSW Steel, given its proximity to JSW’s flagship plant in Vijaynagar, Karnataka,” said one person close to the development, requesting anonymity.
“If JSW wins this, it doesn’t make sense to pursue Essar Steel, which is much larger at 10mt, costs much more and is on the west coast.”