A Two-Way Race For Bhushan Steel As Bidding Deadline Closes
JSW Steel and Tata Steel submit final bids for Bhushan Steel
The race for control of Bhushan Steel Ltd has narrowed, with only two potential investors submitting final bids before the cut-off date for resolution plans. Bhushan Steel is being resolved under the Insolvency and Bankruptcy Code and the final deadline to submit bids was February 3.
According to three people familiar with the process, Tata Steel Ltd and a 50:50 venture between JSW Steel and a fund promoted by the Piramal Group and Bain Capital Credit submitted their bids to resolution professional, Vijaykumar V Iyer, on Saturday. The people spoke on the condition of anonymity since the information is not yet public.
Tata Steel, JSW Steel, Piramal Enterprises and Iyer did not respond to queries mailed to them on Sunday.
The bids will be opened by the resolution professional on Tuesday, following which, details will be shared with the lenders.
The JSW-Piramal-Bain consortium is said to have offered a value of Rs 25,000-30,000 crore, according to one of the three people quoted above. BloombergQuint could not ascertain the value of Tata Steel’s bid. On Saturday, The Economic Times reported that JSW Steel, through its tie-up, is planning to offer Rs 30,000 crore for Bhushan Steel's assets, which is double the liquidation value of Rs 15,000 crore. Liquidation value is typically the least possible value that a creditor can recover under insolvency.
In an interview to BloombergQuint in January, JSW Group Chairman, Sajjan Jindal had said that the group would be bidding for Bhushan Steel's assets in a joint venture with Japan's JFE Steel. However, the plan changed after JFE Steel walked out of the deal, according to two of the three people quoted above.
Earlier, on Sunday, Press Trust of India (PTI) reported that billionaire Lakshmi Mittal's ArcelorMittal had submitted a bid for Bhushan Steel's assets. However, an ArcelorMittal spokesperson denied submission of a bid for Bhushan Steel in an email response to BloombergQuint.
Bhushan Steel owes its financial creditors over Rs 56,000 crore, according to information available on the company's website. Operational creditors are owed Rs 652.86 crore. Bhushan Steel is one of the largest cases to have been admitted under the IBC for stress resolution. Bankers had sent the case for resolution under the Insolvency Code following directions from the Reserve Bank of India in June 2017. At that time, the RBI had identified twelve large accounts for insolvency action.
According to information available on the company's website, Bhushan Steel is the third largest secondary steel producer in India with an existing capacity of 5.6 million tonne per year.