Acquisition of Bhushan Steel by Tata Group historic breakthrough: Goyal

Lawrence Kim
May 21, 2018

Tata Steel Ltd said on Friday it had completed the acquisition of a 72.7 percent stake in Bhushan Steel Ltd, which was in bankruptcy court over unpaid loans.

Singhal has argued that Tata Steel's bid for Bhushan Steel is ineligible under Clause 29 of the IBC.

The liquidation value of Bhushan Steel was Rs. 14,541 crore but creditors received nearly 4 times the amount (Rs. 36,400).

Kumar said following the Bhusan Steel buyout, public sector banks (PSBs) will write back Rs 7,500 crore of loans which were earlier classified as NPAs. "This is a record step towards resolving the legacy of unprecedented amount of bad bank loans inherited by this government", the minister said.

The board of Bhushan Steel approved the sale of 74.99 shares to Tata Steel's wholly-owned subsidiary Bamnipal Steel Ltd for almost Rs 159 crore, the company said in its filing with the stock exchanges.

"For the first time such a large loan resolution has been achieved through upfront payment received by banks through sale of a company".

He said the NPA resolution process was being done through a fair and transparent Insolvency and Bankruptcy Code which has been recognized by worldwide credit rating agencies as well.

"Cleaning up banks and resolving NPAs is part of Congress-mukt Bharat (Congress-free India)". This will boost employment & the economy even more, he added.

However, insolvency proceedings were taken against the company on 26 July 2017 under the Insolvency and Bankruptcy Code, 2016 and the company suffered a lot.

The outstanding principle amount to a consortium of lenders was Rs 44,000 crore excluding interest. Another state-owned lender Bank of India (BoI) said it would be able to realise around Rs 1993 crore from the first successful NCLT resolution of Bhushan Steel.

Further, Rs 1,200 crore will be paid to the operational creditors of BSL over a period of 12 months as per their admitted claims and terms of approved resolution plan.

"Once all the resolutions are successfully completed who is expected in FY 2019, the bank will see a rise in profitability", he added. "This is as important as 1991 in our economic history", Sanyal said on Twitter.(PTI).

Other reports by Click Lancashire

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