BHUSHAN POWER & STEEL
There was a bitter and prolonged family dispute over the assets of Bhushan Steel's patriarch Brij Bhushan Singal. After a decade long tussle the group eventually divided in 2011. The assets were split between Singal’s two sons – Sanjay and Neeraj. The elder son, Sanjay, runs Bhushan Power and Steel. The company has a steel capacity of 2.3 mprta and a 503 MW captive power plant.
In two years until March 2016, the company accumulated a loss of `3,160 crore following the high cost of raw materials for making steel and power production. Revenues fell to `7,738 crore from `10,425 crore owing to the lower price of steel. The company is now facing bankruptcy proceedings at the Delhi bench of the National Company Law Tribunal (NCLT). An email sent to Sanjay Singal went unanswered.
The bankers are keen to bring the company under the “Scheme for Sustainable Structuring of Stressed Assets” (S4A). The promoters hold more than 90 per cent stake in the company and an equity dilution can easily happen while keeping Singal at the helm of affairs. The other option could be deep restructuring wherein the bankers extend the repayment period and also provide interest rate concessions.
A section of the bankers are a bit sceptical about the possibility of turning around the company because of certain investigations by government agencies.