JSW-Piramal offer ₹29,700 cr for debt-laden Bhushan Steel
The combine of JSW Steel Limited and Piramal Enterprises has offered an upfront payment of ₹28,000 crore to lenders of debt laden Bhushan Steel Limited which currently facing corporate insolvency proceedings two people aware of the ongoing bidding process for the troubled steel company have told Mint on condition of anonymity.
According to the people cited above, JSW has placed bid of ₹29,700 crore, offering a upfront cash payment of ₹28,000 crore to the banks and has offered to invest another ₹1,700 crore as fresh equity into the company.
JSW- Piramal’s offer roughly translates into a 50% haircut for Bhushan Steel’s lenders which has a overall debt ₹42,355 crore. JSW has also proposed to expand the production capacity of Bhushan steel from existing 5.6 mtpa (metric tonnes per annum) to 10 mtpa. A JSW spokesperson declined requests for comment while an emails sent to the interim resolution professional of Bhushan Steel and Tata Steel were yet to receive any response.
According to the people cited above Tata Steel limited has also bid for Bhushan Steel but the value of the bid was not immediately known . The third bid made by a section of Bhushan Steel’s employees is likely to be disqualified it was not supported by a bank guarantee, they said. The liquidation value of Bhushan Steel was earlier fixed at ₹20,000 crore, the people cited above said. “The bids were opened today and the committee of creditors of Bhushan Steel will now evaluate the resolution plans submitted by the bidders,” said the first person cited above.
There is a possibility that the creditors will also engage with Tata steel before a final decision is made.
Bhushan Steel is the largest manufacturer of auto-grade steel in India, making flat products, hot rolled and cold rolled coils, besides operating a galvanised coil and sheet line. Its clients include General Motors, Hyundai Motors, Ford Motor, Mahindra and Mahindra Ltd and Eicher Tractors. Essar Steel, meanwhile, has increased capacity utilisation to 7.1 mtpa, from 35% in 2015 to over 80% in 2017. Bhushan Steel is among the the 12 cases identified by the Reserve Bank of India for early bankruptcy proceedings.
MUMBAI: