NCLT approves Tata Steel as the owner of Bhushan Steel
15 May 2018
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The National Company Law Tribunal (NCLT) on Tuesday approved Tata Steel’s bid to take over debt-ridden Bhushan Steel.
It rejected petitions by the employees of the company and L&T against the takeover.Tata Steel had emerged the highest bidder for Bhushan Steel in March (See: Tata Steel wins bid to acquire Bhushan Steel).
While it was awaiting the nod from the insolvency court, Bhushan Steel employees and L&T filed petitions against it. L&T sought a higher priority in the recovery of loans.
The NCLT rejected their petitions and instead fined both parties 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 Tata Steel's Rs32,500 crore offer along with 12.27 per cent equity.
On 17 April Tata Steel became the first company to successfully bid for a stressed company which had high NPAs under the IBC law.
Bhushan Steels and Electrosteel Steels were a part of Reserve Bank of India’s ‘Dirty Dozen’ list, which identified companies for immediate resolution. Currently about 38 companies are at different stages of the insolvency process.
