First under IBC - Bhushan Steel bought by Tata Steel
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The company has received all the approvals and will own 73 per cent in the company. It will absorb all the employees of the company as per the resolution plan submitted and approved by the committee of creditors.
Tata Steel also plans to keep the company listed for the next 2-3 years. The acquisition is being done by Bamnipal Steel Ltd (BNPL), a subsidiary of Tata Steel.
“BNPL has successfully completed the acquisition of controlling stake of 72.65 per cent in BSL in accordance with the approved resolution plan under the Corporate Insolvency Resolution Process (CIRP) of the Insolvency and Bankruptcy Code 2016 (IBC) which has been managed by Vijaykumar V lyer, Partner, Deloitte Touche Tohmatsu India LLP, in his capacity as the resolution professional,” Tata Steel said in a statement.
The admitted CIRP cost and employee dues have been paid as required under IBC. Settlement of the amounts equivalent to Rs.35,200 crore towards financial creditors of BSL is being undertaken as per the terms of the resolution plan and corresponding transaction documents, the company said.
Tata Steel said Rs.1,200 crore will be paid to operational creditors of BSL over a period of 12 months.
“The investment from BNPL in BSL has been done through a combination of equity of Rs.158 crore and inter-corporate loan of Rs.34,963 crore . Additionally, Rs.100 crore has been paid by BNPL to the financial creditors of BSL as consideration for novation of remaining financial debt of BSL.
“The acquisition is being financed through a combination of external bridge loan of Rs 16,500 crore availed by BNPL and balance amount through investment by Tata Steel in BNPL. The bridge loan availed by BNPL is expected to be replaced by debt raised at BSL over time,” it said.
Incorporated in 1983, Bhushan Steel is currently fifth largest integrated steel plant with a crude steel capacity of about 5.6 million tonne per annum (mtpa) along with downstream facilities of cold rolled products of about 2 mtpa. It caters to major auto industry and consumer durable manufacturers through its upstream facilities in Meramandali, Odisha and downstream facilities in Khopoli, Maharashtra and Sahibabad, Uttar Pradesh. #casansaar (Source - PTI, The Hindu Business Line)
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