Acquisition of Bhushan Steel by Tatas is a historic breakthrough

Brunilde Fioravanti
Mag 21, 2018

"A historic moment! Tata buys Bhushan Steel for Rs 36k crores + 12 pc equity".

Retail, agri and MSME advances constituted more than 50 per cent of the total lending of the bank, Mohapatra said. "This is a record step towards resolving the legacy of unprecedented amount of bad bank loans inherited by this government", the minister said.

On Friday, Tata Steel announced that they have successfully completed acquisition of controlling stake of 72.65% in Bhushan Steel in accordance with the approved Resolution Plan under the corporate Insolvency Resolution Process (CIRP) of IBC.

However, insolvency proceedings were taken against the company on 26 July 2017 under the Insolvency and Bankruptcy Code, 2016 and the company suffered a lot.

On a petition filed by Bhushan Steel promoter Neeraj Singal in NCLAT challenging the eligibility of Tata Steel as resolution applicant under Section 29 A of the Insolvency and Bankruptcy Code, he said: "Tata Steel has gone through the process". The bridge loan availed by BNPL is expected to be replaced by debt raised at BSL over time. "This will boost employment and the economy even more", Goyal said in a tweet.

He added that the Narendra Modi government was "systematically cleaning the financial and economic mess left behind by the Congress".

The admitted CIRP cost and employee dues have been paid as required under IBC, it said.

And the fraud-ravaged Punjab National Bank, which was the term loan consortium leader for BSL and had an exposure of close to Rs 5,000 crore, will have to wait longer for a respite from its woes. The top five defaulters were - Bhushan Steel, Essar Steel, Lanco Infratech, Bhushan Power & Steel and Alok Industries as they had debt of Rs 57,200 crore, Rs 51,700 crore, Rs 49,100 crore, Rs 47,800 crore and Rs 30,200 crore respectively, as per JM Financials.

The steel maker also said the acquisition is being financed through a combination of external bridge loan of Rs 16,500 crore availed by its subsidiary and the balance through investment by it in BNPL.

A Tata Steel unit sold Rs5,000 crore of three-month commercial paper to also help fund the Bhushan asset purchase, separate people familiar with the matter said on Wednesday.

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