Sajjan Jindal-led JSW Steel is close to finalising a compromise with financial creditors and completing the ₹19,700-crore takeover of debt-laden Bhushan Power & Steel (BPSL), five people familiar with negotiations said.
That should help bring the more than three-year bankruptcy resolution process to its climax, they said. A deal may be completed before the end of the current fiscal year, allowing JSW to take over the company while insulating it from any adverse Supreme Court judgement in cases related to BPSL, these people said.
“Large creditors who control the lion’s share of the debt are on board. It will now be put before the larger committee of creditors (CoC) as early as this week. It is likely the transaction will be completed in March,” said one of the persons cited above. Banks are keen to complete the deal before fiscal-end as they stand to gain from the large writeback.
A Difficult Year
The recovery would also come in a difficult year, in which banks have struggled to get rid of non-performing assets amid tepid loan growth due to the Covid-19 pandemic.
Large financial creditors have agreed to give JSW an assurance that they will return the money to the company in case ongoing matters related to BPSL in the Supreme Court have any adverse impact on it.
BPSL was among the 12 large cases referred to bankruptcy courts by the Reserve Bank of India (RBI) in 2017. The company owed lenders Rs 48,000 crore.
JSW had bid Rs 19,700 crore for the 3.5-million tonne steel plant, pipping Tata Steel’s Rs 16,000-crore offer. The company was declared the winning bidder by the National Company Law Tribunal in September 2019. However, JSW has so far not made the payment, as it awaits the conclusion of the Supreme Court hearing in a case involving an ED investigation into allegations of fraud against the erstwhile promoters of BPSL, over which the agency could attach BPSL assets.
In February last year, JSW was granted immunity from prosecution against any investigation pursued by government agencies against previous promoters by the National Company Law Appellate Tribunal.
Source: Economic Times