Tata Steel acquires Bhushan Steel, will settle ₹35,200 cr dues
MUMBAI: Tata Steel has announced its acquisition of Bhushan Steel (BSL) through its wholly-owned subsidiary Bamnipal Steel Ltd (BNPL), completing the resolution of the first case under the Insolvency and Bankruptcy Code (IBC), 2016.
Tata Steel said in a press statement that it has taken a controlling stake of 72.65% in BSL and paid the admitted corporate insolvency costs and employee dues, as required under IBC. Further, settlement of amounts equivalent to ₹35,200 crore towards financial creditors of BSL is being undertaken and ₹1,200 crore will be paid to the operational creditors of BSL over a period of 12 months, said the statement.
Meanwhile, Neeraj Singhal, former vice-chairman and managing director of Bhushan Steel, has moved the National Company Law Appellate Tribunal (NCLAT) seeking a stay on the takeover by Tata Steel. Mint has learnt that Singhal, a member of the family of the original promoters, also wants to prevent his equity from being transferred to Tata Steel. As of March, the old promoter group owned 43.9% of the equity in publicly-listed BSL.
Tata Steel’s legal team has filed a caveat, a pre-emptive application that the court will not pass an order on this appeal without hearing the company.
This is not the first of unfore- seen delays for Tata Steel. The company has already fended off litigation from Larsen & Toubro Ltd, one of Bhushan’s operational creditors, and BSL’s employees. Dismissing these cases, on Tuesday the National Company Law Tribunal (NCLT) approved Tata Steel’s takeover of BSL.
The delays in its takeover bid have led to corporate governance issues at the plant, with the senior management hinting earlier to Mint that there might be cases of under-invoicing and contracts being awarded to people known to the erstwhile promoter.
A spokesperson for Tata Steel said that employees of the company have moved into key locations of BSL on Friday, including Khopoli, Dhenkanal and Sahibabad, wresting physical control of plants before NCLAT hears Singhal’s plea on Monday.