Tata SteelBSE 1.33 % and JSW have submitted offers for bankrupt Bhushan Power and Steel on Thursday, the final date for submission of offers for the company.
Both parties submitted binding offers that are above the liquidation value for the company. VedantaBSE -0.64 %, which was widely expected to bid for the company did not submit an offer.
JSW was a late entrant to the bidding process and had not submitted an expression of interest initially.
All the above parties had conducted detailed due diligence on the company including physical inspection of plants and attended a pre-bid conference after they were given access to a virtual data room containing information about the company’s financials and various documents supporting it.
ArcelorMittal, also initially amongst prospective bidders for the company, withdrew from the bidding process after conducting due diligence, ET reported in its edition dated 24 January.
Mahender Khandelwal, head of restructuring services at audit and advisory firm BDO is the resolution professional for Bhushan Power and Steel. He could not be reached for comment.
SBI Caps is advising the creditors on the bidding process.
Law firm Cyril Amarchand Mangaldas is the legal counsel.
The Sanjay Singhal-promoted company was admitted to insolvency proceedings by Punjab National Bank in June last year. The committee of creditors comprises over a dozen banks with State Bank of India having disbursed the largest proportion of loans to the company.
The group of creditors are owed Rs. 48,524 crores by the debt-laden company.
The earlier deadline for submission of final bids for the company was extended from 29 January to 8 February as the creditors were awaiting a decision from the Insolvency and Bankruptcy Board on the bid evaluation process. The IBBI through a circular clarified that the highest bidder in the auction would be called for negotiations as opposed to the earlier plan of inviting all the bidders for negotiations.
The committee of creditors had also sought a report on the fair valuation of the company’s assets as it had added significant capacities from the time it went into insolvency resolution as existing credit lines were unutilized. The fair value of the assets was almost double the initial liquidation value estimates put together by the valuers, Duff and Phelps and PriceWaterHouse Coopers, according to the bankers.
Bhushan SteelBSE 1.72 %, a company owned by Sanjay Singhal’s brother received offers from Tata Steel, JSW and a group of employees backed by a financial investor on 3 February, ET reported on Monday.
Bhushan Power & Steel manufactures steel products for the automotive and appliances industry as well as for varied electrical applications. Its products also include hot-rolled and cold-rolled products and galvanized items.
As many as twelve parties including the promoter had submitted initial expressions of interest for the company. These included a Hong Kong-based arm of Bank of America Merrill Lynch, Asia Pacific Capital, Mesco Steels, Edelweiss group’s asset reconstruction arm and Kolkata-based Shyam Metallics and Energy Limited. Sanjay Singhal was disqualified after an ordinance amending the bankruptcy code in November prohibited defaulting promoters from bidding for their companies.
