NCLT approves JSW Steel's Rs19,700-cr bid for Bhushan Power & Steel
06 September 2019
The National Company Law Tribunal (NCLT) on Thursday approved JSW Steel's Rs19,700-crore resolution plan for debt-laden Bhushan Power & Steel Ltd (BPSL).
The NCLT also rejected the objections raised by Tata Steel over the bids submitted by JSW and its erstwhile promoters.
JSW bid of about Rs19,700 crore for BPSL is higher than rival bids by Tata Steel Ltd and Liberty House Group for the insolvent company.
A two-member principal bench of the NCLT headed by president Justice M M Kumar also said criminal cases against the promoters of BPSL for siphoning of funds from the company will not impact JSW Steel as its new promoter.
The tribunal has also said the profits made by BPSL during insolvency period will be distributed among creditors of Bhushan Power, in accordance with the ruling of the National Company Law Appellate Tribunal (NCLAT) in the ArcelorMittal case.
In April, the NCLT had reserved its judgement after concluding hearing from the parties.
Tata Steel had objected the improved financial offer of JSW Steel before the Resolution Professional and the Committee of Creditors' of Bhushan Power and Steel.
The tribunal had initiated corporate insolvency resolution process (CIRP) against BPSL on July 26, 2017, admitting the plea of its lead lender Punjab National Bank (PNB).
Bhushan Power and Steel will add 3.5 million tonnes of annual production capacity to the Sajjan Jindal-led mill’s operations and establish the Mumbai-based company’s footprint in the eastern part of the country.
Bhushan Power is also under probe over a series of accounting frauds, including those totalling about Rs5,600 crore reported by Allahabad Bank Ltd and Punjab National Bank. The criminal proceedings against the former founders of Bhushan Power over the alleged siphoning off of funds, however, will not affect the sale proceedings, the court said on Thursday.
The court also appointed a monitoring panel to oversee implementation of JSW’s resolution plan.