Tata Steel beats JSW, wins bid for debt-laden Bhushan Steel
MUMBAI: Tata Steel Ltd has emerged as the highest bidder for acquiring a controlling stake in Bhushan Steel Ltd, which is currently undergoing insolvency proceedings.
In a regulatory filing on Wednesday, Tata Steel said that it has been identified as the highest bidder under the corporate insolvency resolution process by the committee of creditors of Bhushan Steel on March 6.
Tata Steel is in discussions with advisers to the committee of creditors and the resolution professional of Bhushan Steel on the next steps in the process, the Tata group company said in the filing.
Although Tata Steel did not disclose the financial details of the bid, two people close to the bidding process said the company has offered close to ₹34,800 crore as upfront payment to banks and an additional ₹1,200 crore to operational creditors.
In addition, Tata Steel has also offered a 12% equity stake to lenders to Bhushan Steel. Tata Steel did not respond to requests seeking details of the bid until press time.
With this, Tata Steel has outbid rival JSW Steel Ltd.
Mint had reported on February 8 that JSW Steel had offered ₹29,700 crore to lenders of Bhushan Steel.
Tata Steel and JSW Steel were the only bidders for Bhushan Steel and had submitted their offers for the debt-laden steel maker on February 3.
The liquidation value of Bhushan Steel was fixed at ₹20,000 crore.
Bhushan Steel is the largest manufacturer of auto-grade steel in India and owes close to ₹44,000 crore in debt to various lenders.
The company is into manufacturing of flat products, hot rolled and cold rolled coils, besides operating a galvanised coil and sheet line.
Its clients include General Motors Co., Hyundai Motors Co., Ford Motor Co., Mahindra and Mahindra Ltd and Eicher Tractors Ltd. Bhushan Steel is among the 12 cases identified by the Reserve Bank of India (RBI) for early bankruptcy proceedings.