JSW Steel is confident of completing the Bhushan Power and Steel acquisition even in the current state of economy ravaged by Covid, if the Supreme Court gives its approval.

Sajjan Jindal, Chairman, JSW Group, told BusinessLine that JSW Steel remains committed to the acquisition and will be able to proceed with fulfilling the requirements of the transaction on receipt of all appropriate clearances.

Steel demand has turned upside-down in last two years since JSW Steel first placed its ₹19,700 crore bid for the bankrupt Bhushan Power, and it plunged further after the outbreak of Covid pandemic.

The National Company Law Appellate Tribunal finally cleared JSW Steel bid in February with the immunity from investigation against the current promoters of BPSL.

Aggrieved, BPSL promoters have moved the Supreme Court against NCLAT ruling. Interestingly, the Enforcement Directorate is yet to lift the attachment on the BPSL property that is being sold to JSW Steel.

“We are waiting for favourable decisions on certain matters related to the BPSL acquisition,” said Jindal.

Even as JSW Steel prepares to complete the acquisition, some of the JSW Group companies have availed the three months’ moratorium on loan repayment to conserve cash for their operations.

Jindal said the three-month moratorium was a good starting point given the impact Covid had on global economies.

However, he said the need of the hour is mainly to ensure adequate credit flow to the industry at competitive rates of interest.

Infra investment

There is an urgent need to frontload infrastructure investments by the government and ensure a credit flow at the competitive rates of interest. Currently most of the developed economies have made borrowing rates close to zero, while it is still at 10 per cent in India, said Jindal.

Despite abundant liquidity provided by the RBI, banks are still being risk-averse and not passing the credit on to the industries, he said.

This risk aversion attitude of the banking sector will, unfortunately, further slow down the economic recovery process, he added.

The government needs to look at making India a global manufacturing hub across all sectors including textiles, leather, agro-processing, pharmaceuticals, information technology, metals and mining, especially steel. This can happen with bold policy measures led by the government and a proactive approach from business leaders across the country, said Jindal.

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