Tata Steel's takeover of the Bhushan Steel makes the second successful resolution under the newly-adopted IBC law.
It is now official — Tata Steel is now the owner of bankrupt Bhushan Steel. Tata Steel’s takeover of the Bhushan Steel makes the second successful resolution under the newly-adopted IBC law. The National Company Law Tribunal (NCLT) on Tuesday approved Tata Steel’s bid for debt-ridden Bhushan Steel rejecting petitions filed by the employees of the company and L&T against the takeover.
Tata Steel had emerged highest bidder for Bhushan Steel in March. While it was awaiting the nod from the insolvency court, Bhushan Steel employees and L&T filed petitions against it. Engineering and construction major L&T sought higher priority in the recovery of loans. Rejecting petitions, the NCLT slapped both parties with a fine of Rs 1 lakh. The tribunal also rejected Bhushan Energy’s plea to continue its power purchase agreement with Bhushan Steel.
The Committee of Creditors (CoC) for Bhushan Steel had approved Rs 32,500 crore deal along with 12.27% equity in Bhushan Steel offered by Tata Steel in March. Tata Steel was the first to become a successful higher bidder under the IBC law. On April 17, Vedanta forayed into the steel business when it took over the ownership of bankrupt Electrosteel Steels.
Both Bhushan Steels and Electrosteel Steels were a part of Reserve Bank of India’s ‘Dirty Dozen’ list which identified for them immediate resolution. Now, about 38 companies are still at different stages of the insolvency process.