JSW Steel Ltd. is expected to double its bid for debt-laden Bhushan Steel Ltd. to as high as Rs 30,000 crore, setting the stage for a bidding war with rivals like Tata Steel Ltd. and ArcelorMittal, a source privy to the development said.
On Jan. 24, the insolvency resolution professional for Bhushan Steel had extended the deadline to submit resolution plans to Feb. 3 from Jan. 25.
“The liquidation value has been set at Rs 15,000 crore (by the committee of creditors); below that the bid will not be accepted. Looking at the competition, JSW Steel is expected to double its bid amount. It can be between Rs 25,000 crore and Rs 30,000 crore,” the source said.
Bhushan Steel, among the 12 non-performing accounts identified by the Reserve Bank of India for resolution under the Insolvency and Bankruptcy Code, owes its lenders Rs 44,478 crore.
JSW Steel decided to bid for Bhushan Steel, maker of auto-grade steel in India, in a team. It roped in its Japanese business partner JFE Steel Corp and Piramal Enterprises Ltd., the flagship firm of Piramal Group, for the purpose.
According to the information on Bhushan Steel's website, the company is the third-largest secondary steel producer in the country with an existing capacity of 5.6 million tonnes a year.