Companies

JSW Steel expects SC verdict on BPSL on Tuesday

Suresh P Iyengar Mumbai | Updated on November 02, 2020

Seshagiri Rao, Joint Managing Director, JSW Steel   -  BL

Hopes to close deal before quarter-end

After executing the resolution plan of Asian Colour Coated successfully, JSW Steel expects the Supreme Court to pronounce its final verdict in Bhushan Power and Steel insolvency case on Tuesday and complete the deal before this quarter-end.

BPSL insolvency proceedings has been on for the last three-years and the ₹19,700-crore resolution plan of JSW Steel itself was approved by NCLT in September, 2019.

Seshagiri Rao, Joint Managing Director, JSW Steel, said the Supreme Court is expected to give its verdict on Tuesday and the company will make the payment after the order is published.

“We hope to close the deal this quarter once the verdict is pronounced as the funds required for the acquisition has already been tied up,” he added.

The case was last listed in Supreme Court for hearing on September 24 but could not be taken up as the Registrar suddenly pruned the list of cases for hearing.

Following NCLT approval, JSW Steel moved NCLAT seeking immunity from the ongoing investigation against the promoter of BPSL Sanjay Singal. In February, NCLAT provided the immunity and approved JSW Steel resolution plan.

However, the Enforcement Directorate moved the Supreme Court challenging NCLAT authority to provide immunity to JSW Steel in a case against BPSL promoter under Prevention of Money Laundering Act.

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Last July, state-run lender Punjab National Bank declared loan exposure of ₹3,805 crore to bankrupt BPSL as fraudulent and filed a case in the ED against the company’s promoters. The ED had not only attached the properties under insolvency but also dragged JSW Steel into the investigation as it a had tie-up with BPSL in a mining venture.

JSW Steel dismissed the contention on the mining joint venture stating that the mining was allotted by the Government to a consortium of four companies and the allotment has since been cancelled.

NCLAT decision questioned

Meanwhile, Singal had questioned the NCLAT’s decision to approve JSW Steel’s bid despite the Enforcement Directorate attaching BPSL’s asset under the PMLA.

He had also questioned, the NCLAT decision to allow the winning bidder JSW Steel to retain the EBITDA of ₹3,000 crore made during the insolvency period.

Amid many twist and turn, the Supreme Court had announced that it will pronounce its final verdict in the case on November 3.

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Published on November 02, 2020

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