The National Company Law Tribunal (NCLT) on Wednesday allowed bankruptcy proceedings against debt-ridden Bhushan SteelBSE -1.34 % and Bhushan Power & Steel (BPSL).
The companies have 180 days to come up with a resolution — though they can ask for an additional 90 days in some situations — or face liquidation.
NCLT had reserved its order last week over the bankruptcy petitions filed by the State Bank of India and Punjab National BankBSE 0.98 %, lead bankers to Bhushan Steel and Bhushan Power & Steel, respectively.
Both petitions were filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, wherein the financial creditor initiates insolvency proceedings with a claim. SBI filed a claim to recover Rs 4,295 crore from Bhushan Steel and $490 million of foreign currency loan.
NCLT had issued insolvency notices to both companies, with directions to file replies, earlier this month. Bankruptcy proceedings have also been initiated against Electrosteel Steels, Lanco Infratech, Alok Industries and Jyoti Structures —among the 12 non-performing assets cases identified for resolution by the Reserve Bank of India — Amtek Auto and Essar Steel.
NCLT, Chennai has appointed an insolvency resolution professional (IRP) in the case of Nagarjuna Oil Refinery (NOCL). The government has already introduced the Banking Regulation (Amendment) Bill, 2017, in the Parliament in order to replace the ordinance it had promulgated in May to empower the RBI to deal with bad loans.
