Tata Steel Ltd has been declared the successful resolution applicant for Bhushan Steel Ltd by the committee of creditors (CoC), the firm stated in a stock exchange notification on Friday. The resolution plan finalised by the creditors will now require approval from the National Company Law Tribunal (NCLT) and the Competition Commission of India (CCI).
In a report dated 7 March, Mint stated that Tata Steel has emerged as the highest bidder for the debt-ridden steel firm, outbidding JSW Steel Ltd.
Bhushan Steel owes about Rs44,000 crore to its creditors. As per the resolution plan, Tata Steel has offered upfront cash of about Rs34,800 crore to the financial creditors along with Rs1,200 crore to operational creditors.
Even as the steel major’s resolution plan has been finalised by the CoC, the pending cases against the firm in Kolkata NCLT can create hurdles for its bid.
Tata Steel had also participated in the bidding process for Electrosteel Steels Ltd. Its bid, however, has been challenged by Abhishek Dalmia-led Renaissance Steel India Pvt Ltd.
According to the petition filed by Renaissance Steel, Tata Steel is ineligible as a bidder under the insolvency and bankruptcy code on account of several criminal cases against the firm in the UK.
The petition has alleged that Tata Steel UK Ltd, a subsidiary of Tata Steel, has faced multiple prosecutions and had pleaded guilty to violating the UK Health and Safety Act several times. It also stated that even as the offences were punishable with two years in jail, the UK authorities chose to impose fines.
Meanwhile, Kolkata NCLT has sought a response from resolution professional Dhaivat Anjaria explaining the criteria on the basis of which Tata Steel has been declared eligible for bidding.
Tata Steel spokesperson was not available for a comment till the filing of the report.
Source: Mint