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JSW Steel has sweetened the deal to acquire the stressed Bhushan Power and Steel by offering an additional payment of R. 400 crore over and above its earlier bid of ₹19,350 crore. The admitted claims of financial creditors in the company were ₹47,158 crore.
In a new twist to the three-year-old insolvency case, JSW Steel has voluntarily offered to hike the deal size by offering ₹400 crore from the EBITDA of BPSL generated during the insolvency period to close the acquisition early, said sources.
As per the approved resolution plan, the entire EBITDA generated by BPSL during the insolvency period belongs to JSW Steel.
In fact, Sanjay Singhal, the erstwhile promoter of BPSL, has contested this point in the Supreme Court.
However, JSW Steel’s attempt to sweeten the deal is a dramatic change from seeking more time in April to make full and final payment to close the deal after its bid was approved by NCLAT with the requisite immunity sought against ongoing investigation against Singhal and BPSL.
The Enforcement Directorate had contested the immunity provided by NCLAT and the case is now being heard by the Supreme Court.
The sharp revival in steel demand post-Covid and the economic stimulus offered by the government has boosted steel demand. It has also instilled confidence in corporates to unveil their capex plans.
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