NCLT approves Tata Steel takeover of Bhushan Energy
31 May 2019
The principal bench of the National Company Law Tribunal (NCLT) on Thursday approved Tata Steel’s Rs780-crore bid to acquire Bhushan Energy. The NCLT, while approving Tata’s bid, also rejected objections raised by Bhushan Energy’s former promoter Neeraj Singhal to Tata Steel’s bid for the debt-laden company.
Under the proposal, Tata Steel will make an upfront payment of Rs730 crore and an additional Rs50 crore to operational creditors of the company.
Tata Steel will also make a Rs367 crore equity infusion in the company, depending on the prevalent market conditions. Till the time Tata Steel takes over the company and starts running it, the Committee of Creditors and the resolution professional of the company will act as monitoring agency to oversee the day to day functioning of the company, the NCLT said.
Bhushan Energy was taken to the NCLT by State Bank of India (SBI) for not repaying overdue loans of Rs500 crore. The company, however, failed to reach debt resolution within the stipulated period of 180 days. The NCLT, on 6 June, gave the company an additional 90 days to arrive at a resolution plan.
Incorporated in 2005, Bhushan Energy is based in Dhenkanal, Odisha. It is an arm of Bhushan Steel. Bhushan Energy had reported a gross debt of Rs2,336 crore in 2015-16 (April-March).