Bhushan Steel says servicing debt so far

Aug 12 2014, 18:06 IST
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Bhushan Steel said last Thursday that Managing Director Neeraj Singal had surrendered to the CBI to participate in the investigation. Bhushan Steel said last Thursday that Managing Director Neeraj Singal had surrendered to the CBI to participate in the investigation.
SummaryBhushan Steel said last Thursday that Managing Director Neeraj Singal had surrendered to the CBI to participate in the investigation.

Bhushan Steel Ltd , a debt-ridden company whose managing director was arrested last week in a bribery case involving a bank chairman, has so far been able to service its loans, its finance director told Reuters on Tuesday.

The Central Bureau of Investigation (CBI), India's top crime-fighting agency, arrested Sudhir Kumar Jain, the chairman of mid-sized state-run lender Syndicate Bank Ltd earlier this month over allegations of taking bribes to grant loan extensions to Bhushan Steel.

Bhushan Steel said last Thursday that Managing Director Neeraj Singal had surrendered to the CBI to participate in the investigation.

Bhushan Steel denies wrongdoing in the case, which has raised concerns about its day-to-day functioning and ability to manage net debts of $5.86 billion - eight times its equity market value of $732 million.

"As of date, there is no bad loan," Finance Director Nittin Johari said. "We are in talks with the banks."

Johari said he expected clarity after a meeting of lenders including, Punjab National Bank (PNB) and the State Bank of India (SBI), on Aug. 18.

"All depends upon the banks, what they decide, how they are going to support. Because everything is not on the company's hands," Johari said by phone. "They are supporting the company but let's see. After the meeting everything is going to be clear."

The company's stock has more than halved in the past month, compared with a 3 percent rise in the broader index.

Separately, Bhushan Steel said on Tuesday that it had posted a quarterly loss and that its board had approved the issue of securities to raise up to $1 billion.

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