Bhushan Steel stock surged over 18 per cent on Monday as it got approval for its long-term restructuring of its loan under the RBI’s 5:25 scheme.

The stock rallied up to 18.5 per cent to trade at Rs 71.70 per cent towards the end of the day’s trading session.

This is the second straight session where Bhushan Steel has seen a strong rally. On Friday, Bhushan Steel had ended nearly 20 per cent up at Rs 60.40 per share, after the company shared the news of lender's nod for restructuring.

"As referred in the news, on 15th December 2014, RBI announced a scheme for long-term restructuring of loans in line with cash flows. The joint lenders forum have agreed to extend the loans of BSL (Bhushan Steel Ltd) for a tenure of 25 years under the said scheme. However, the respective authorities of the banks have to approve the scheme, which is under process with the respective banks,” the company had said in a BSE filing on Friday.

Bhushan Steel further said that the company has received sanction from some banks only. However, the “sanction from rest of the banks are still awaited".

Debt repayment

The steel maker’s debt had ballooned to Rs 38,529 crore by March 2015, more than twice the debt on its books in March 2011. The start of the company’s problems can be traced to 2010-11 when its debt repayment obligation more than trebled to Rs 1,118 crore.

A consortium of bankers led by Punjab National Bank (PNB) has a total exposure of about Rs 40,000 crore in the company, according to PTI reports.

Besides PNB, the other banks include State Bank of India, Canara Bank, Bank of India and Dena Bank.

During the March quarter, Bhushan Steel’s net loss stood at Rs 360.77 crore, higher than the Rs.23 crore loss reported in the year-ago period.

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