Tata Steel’s Rs 805 crore bid for Bhushan Energy gets nod

By: |
New Delhi | Published: May 31, 2019 4:51:59 AM

The National Company Law Tribunal (NCLT) on Thursday approved Tata Steel’s Rs 805-crore bid for Bhushan Energy, a unit that belonged to the Delhi-based Singal family.

nclt, tata steel, steel sector, steel industryOn a petition moved by State Bank of India, insolvency proceedings against Bhushan Energy under Section 7 of the Code was admitted by the NCLT’s principal Bench on January 8, 2018

The National Company Law Tribunal (NCLT) on Thursday approved Tata Steel’s Rs 805-crore bid for Bhushan Energy, a unit that belonged to the Delhi-based Singal family.

Bhushan Energy would be Tata Steel’s second acquisition of an insolvent firm from the Singal family. In May last year, Tata Steel had acquired Bhushan Steel for Rs 35,200 crore through the Insolvency and Bankruptcy Code (IBC) route.

Bhushan Energy has around Rs 4,000-crore debt. Its liquidation value was seen at Rs 755 crore.

On a petition moved by State Bank of India, insolvency proceedings against Bhushan Energy under Section 7 of the Code was admitted by the NCLT’s principal Bench on January 8, 2018.

Incorporated in 2005, Bhushan Energy is based in Dhenkanal, Odisha. It operates 485 MW of thermal power, developed in two phases, and supplies the entire generation to Bhushan Steel for use in its integrated steel plant, as per a power purchase agreement (PPA) signed between the two firms. Bhushan Energy reported a gross debt of Rs 2,336 crore in FY16 and posted a net loss of Rs 229 crore on revenues of Rs 622 crore in the same period, Capitaline data showed.

During the course of the insolvency proceedings against the company, Bhushan Energy’s promoters objected initiation of the proceedings saying the company has been in troubled waters because of cancellation of its captive coal mine, which forced it to depend on spot market for purchase of coal. This completely eroded the company’s profitability and the financial distress further compounded due to deteriorating situation of the power sector, it argued.
The NCLT in its order, however, rejected the objection.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Planters seek moratorium on rubber imports
2IBC ordinance: No fresh default case for a year from Mar 25
3SBI Q4 net shoots up 327% year-on-year on one-time gain