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L&T moves tribunal to recover ₹900 crore from Bhushan Steel

Mumbai | Updated on March 08, 2018 Published on March 08, 2018

Asks NCLT to acknowledge it as a secured creditor of Bhushan Steel and not as ‘operational creditor’

A day after Tata Steel was declared the highest bider for acquiring stressed assets of Bhushan Steel, Larsen & Toubro Ltd has moved the National Company Law Tribunal seeking higher priority in getting its dues from the latter.

L&T is seeking to recover about ₹900 crore from Bhushan Steel for supply of capital goods.

L&T has asked NCLT to acknowledge it as a secured creditor of Bhushan Steel, instead of being categorised as ‘operational creditor’ under the Insolvency and Bankruptcy Code. Secured creditors come up higher in priority when it comes to settlement of debt.

The NCLT has asked the resolution professionals to share their stand on the matter and has listed L&T's plea in Bhushan Steel case on March 23. On Wednesday, Tata Steel said it had emerged the top bidder for the stressed asset of Bhushan Steel by committing a financial package of ₹45,400 crore.

JSW Steel was the other bidder for this asset. Tata Steel has offered to pay Bhushan Steel’s financial creditor ₹35,200 crore, while operational creditors will get ₹1,200 crore.

Tata Steel will invest ₹9,000 crore towards working capital requirements, sources close to the company said.

JSW Living, a joint venture between JSW and Piramal Enterprises, the other contender for Bhushan Steel had bid for ₹28,000 crore, while about 500 employees of Bhushan Steel had come together and placed a resolution plan, but it was not considered as it did not meet the requirement.

Bhushan Steel, which makes auto-grade steel, has an annual production capacity of 5.6 million tonnes.

The company reported a net loss of ₹1,607 crore in the December quarter against net loss of ₹743 crore logged in the same quarter a year ago.

Published on March 08, 2018
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