The committee of creditors of Bhushan Steel and Bhushan Power and Steel will meet on February 23 to decide on the winning bid for the stressed assets.

The bidding for the stressed assets of Bhushan Steel closed on February 3 and the highest bidder was to be announced on February 6, but the resolution professional decided to hold back the announcement.

Similarly, the bidding for Bhushan Power and Steel ended on February 8 and the winning bid was to be announced on the same day. However, no announcement on the highest bidder was made till date.

Interestingly, a group of 500 employees of Bhushan Steel have joined hands with a Singapore-based private equity investors to bid for the company, though it could not submit the minimum bank guarantee to qualify for the bidding process.

JSW Steel has agreed to pay ₹29,700 crore with an offer to repay ₹28,000 crore upfront and the rest in equity, while the only other contender Tata Steel has bid ₹24,000 crore. Banks have put Bhushan Steel, which has a production capacity of 5.6 million tonnes, on the block to recover ₹44,500 crore defaulted by the company.

Similarly, JSW Steel has emerged the highest bidder for Bhushan Steel and Power by agreeing to pay ₹13,000 crore, while Tata Steel has bid ₹11,500 crore for the asset. Anil Agarwal-promoted Vedanta which had conducted the due-diligence did not place the financial bid.

The resolution professional has arrived at liquidation value of ₹9,000 crore and share value of ₹24,000 crore for the unlisted company.

Biggest challenge

Surprisingly, foreign steel companies have preferred to stay away from bidding for the stressed assets, despite the demand in India expected to grow substantially in the coming years due to favourable government policies.

The frequent changes in government policies and arbitrary raw material pricing has been biggest challenge faced by steel companies in India.

Of late, steel companies are exporting over 50 per cent due to lack of demand.

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