JSW Steel To Close BPSL Deal for ₹ 19,350 Cr
After one-and-a-half years of waiting since the takeover offer, JSW Steel is looking to close the Rs 19,350 crore acquisition of bankrupt Bhushan Power and Steel Ltd (BPSL) by March 25. The company is ready with the funds to make payments to the financial creditors of BPSL and it is expected to be completed by March 25.
However, the creditors will have to keep the payment in the escrow account as a case is pending against BPSL’s former promoters in the Supreme Court. The SC had recently ordered the creditors to return the payment to JSW Steel in case the ruling in the pending case goes in favour of the investigating agency, Enforcement Directorate (ED), to attach the assets of BPSL.
In the insolvency and bankruptcy proceedings, JSW Steel had proposed to repay Rs 19,350 crore to the BPSL lenders against their claims of Rs 48,000 crore. The National Company Law Tribunal (NCLT) cleared JSW’s resolution plan in September 2019, but the case got stuck in courts as the ED had attached BPSL’s properties.
SBI is the largest lender to BPSL, followed by PNB, ACRE, Canara Bank, among others. The acquisition of 3.5-million-tonne BPSL may cost just around Rs 6,000 crore on the books of JSW Steel. The lead bidder JSW Steel plans to keep it as a strategic investment, which it will not consolidate by merging with the flagship company. JSW Steel is expected to fund 70 per cent of the acquisition value through debts on the books of BPSL.
JSW Steel is also looking to rope in a strategic investor to divest a 49 per cent stake in bankrupt BPSL to reduce the financial burden further. The strategic investor’s equity contribution will further reduce the liability of the steelmaker.