A worker uses a hand grinding tool to grind the weld line of a large diameter steel pipe used in oil and gas pipelines sit on the production line. (Photographer: Andrey Rudakov/Bloomberg)

IBC: Tata Steel May Bag Both Bhushan Steel And Bhushan Power & Steel

The country’s second-largest private sector steel company, Tata Steel Ltd. has emerged as the highest bidder for both Bhushan Steel Ltd. and Bhushan Power & Steel Ltd., according to two bankers who requested not to be identified.

This is the result of independent bidding processes conducted for both Bhushan Steel and Bhushan Power & Steel under the Insolvency and Bankruptcy Code. The bankers quoted above stated that Tata Steel has offered to pay up to Rs 45,000 crore for Bhushan Steel and Rs 17,000 crore for Bhushan Power.

JSW Steel Ltd., the only other bidder for both companies is said to have put up Rs 30,000 crore for Bhushan Steel and Rs 11,000 crore for Bhushan Power & Steel.

The bankers said details regarding bids for Bhushan Steel were revealed at an informal meeting between banks on Friday. In the case of Bhushan Power & Steel, the details are yet to be formally discussed by lenders.

The Indian Banks’ Association has guided that lenders should only negotiate further with the highest bidder.

In its bid for Bhushan Steel, Tata Steel has offered Rs 35,200 crore towards repaying financial creditors, Rs 1,200 crore to operational creditors and Rs 9,000 crore towards working capital requirements, said the two bankers.

Mahender Kumar Khandelwal, the resolution professional for Bhushan Power confirmed the bid information. Vijaykumar V Iyer, the resolution professional for Bhushan Steel has not responded to BloombergQuint’s queries. Spokespersons for Tata Steel and JSW Steel are yet to respond as well.

Both the Bhushan group companies were on the first list of 12 stressed accounts which the Reserve Bank of India had sent to bankers in June 2017 for immediate action under the Insolvency and Bankruptcy code.

Bhushan Steel owes over Rs 56,000 crore to its financial creditors while Bhushan Power & Steel owes over Rs 48,000 crore. Other debts including those claimed by suppliers and other business associates are not publicly disclosed.