Comments
The National Company Law Tribunal (NCLT) on Tuesday approved the ₹32,500-crore resolution plan submitted by Tata Steel for debt-ridden Bhushan Steel.
The tribunal also imposed a penalty of ₹1 lakh each on Larsen and Toubro and on Bhushan Steel employees.
While the employees had filed an appeal against Tata Steel’s bid, L&T, which has outstanding dues of ₹900 crore from Bhushan Steel, had appealed to the Tribunal to reclassify it as secured creditor so that it can recover more money from the insolvency resolution.
The Bench, comprising NCLT President Justice MM Kumar and SK Mohapatra, also dismissed Bhushan Energy’s plea to direct Tata Steel, the new owners of Bhushan Steel, to continue with its power purchase agreement.
With the deal now approved by NCLT, Tata Steel will add 5.6 million tonnes per annum to its existing capacity of 13 mtpa and emerge as the largest steel producer in the country, ahead of JSW Steel.
Bhushan Steel’s committee of creditors (CoC) had approved Tata Steel’s resolution plan, which includes an allotment of 12.27 per cent equity in the company to creditors. The company, which was admitted for insolvency proceedings last February, had defaulted on its ₹56,000-crore loan.
As it found a new suitor in Tata Steel, the Bhushan Steel scrip was locked at 5 per cent in the upper circuit at ₹23.95 on Tuesday. This will be the second resolution for stressed assets to receive final NCLT approval.
Earlier, Vedanta had bagged Electrosteel Steels with its resolution plan, which involved a cash payout of about ₹5,300-crore and a haircut of 60 per cent to lenders.
Electrosteel plan
Electrosteel owes lenders over ₹13,000 crore, of which about ₹5,000 crore is to State Bank of India alone.
Vedanta had said one of its wholly-owned subsidiaries would subscribe to the share capital of Electrosteel for an aggregate amount of ₹1,805 crore and provide additional funds aggregating to ₹3,515 crore by way of debt.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.