MUMBAI: Tata Steel on Friday said it has emerged as the successful bidder to take over stressed assets of the debt-ridden Bhushan Steel Ltd.The Committee of Creditors (CoC) of Bhushan Steel declared Tata Group’s steel business as the successful resolution bidder, subject to obtaining necessary regulatory approvals, Tata Steel said in a disclosure with the bourses.
However, it remains to be seen if the steel major’s resolution plan finalised by the CoC gets approved, considering the pending cases against it at the National Company Law Tribunal (NCLT), Kolkata bench. It may be noted that the Kolkata NCLT has sought a response from resolution professional Dhaivat Anjaria, explaining the basis on which Tata Steel was declared eligible for bidding. The steel-maker has been facing multiple prosecutions and even pleaded guilty of violating the UK Health and Safety Act.
In fact, Renaissance Steel India — Tata Steel’s rival bidder for Electrosteel Steel’s Ltd — has filed a petition with the Kolkata tribunal saying Tata Steel was ineligible as a bidder under the insolvency and bankruptcy code, on account of several criminal cases against the firm in the UK.
Meanwhile, Tata Steel said it has accepted the Letter of Intent for Bhushan Steel, which owes about Rs 44,000 crore to a consortium of lenders. It may be noted that the company emerged as the highest bidder to buy a controlling stake in Bhushan Steel, as part of bankruptcy proceedings. As per the resolution plan, Tata Steel offered upfront cash of over Rs 34,800 crore to creditors along with Rs 1,200 crore to operational creditors.JSW Steel Ltd was the other significant bidder to acquire distressed assets of Bhushan Steel.
Top steel producer
Tata Steel plans to double capacity to 26 million tonnes in five years and recently commissioned a greenfield steel plant in Odisha. Bhushan Steel will help Tata Steel overtake JSW Steel to become the country’s top steel producer. It has also submitted a bid for Bhushan Power and Steel Ltd.