Bamnipal Steel Ltd (BNPL), daughter company of Tata Steel, recently made the acquisition of 72.65% of controlling stakes in Bhushan Steel Ltd (BSL) for Rs 35,200 Cr.
Tata Steel Ltd made the highest bid to acquire the indebted Bhushan Steel Ltd in an insolvency action. The firm filed for bankruptcy was among the 12 stressed assets that were referred by the RBI for NCLT proceedings next year.
“BNPL has successfully completed the acquisition of controlling stake of 72.65 per cent in BSL in accordance with the approved resolution plan under the Corporate Insolvency Resolution Process (CIRP) of the Insolvency and Bankruptcy Code 2016 (IBC) which has been managed by Vijaykumar V lyer, Partner, Deloitte Touche Tohmatsu India LLP, in his capacity as the resolution professional,” Tata Steel announced in a statement.
It also added that CIRP and employee dues have also been paid, following IBC rules.
The company also said that the settlement of the amounts equivalent to Rs 35,200 crore towards financial creditors of BSL were being carried out accordingly to the agreements of the resolution plan and corresponding transaction documents.
Tata Steed also added that Rs 1,200 crore will be transferred to operational creditors of BSL within the next 12 months in respect of their admitted claims and terms of the approved resolution plan.
“The investment from BNPL in BSL has been done through a combination of equity of Rs 158.89 crore and inter-corporate loan of Rs 34,973.69 crore. Additionally, Rs 100 crore has been paid by BNPL to the financial creditors of BSL as consideration for novation of remaining financial debt of BSL.
“The acquisition is being financed through a combination of external bridge loan of Rs 16,500 crore availed by BNPL and balance amount through investment by Tata Steel in BNPL. The bridge loan availed by BNPL is expected to be replaced by debt raised at BSL over time,” the statement added.
Finally, the nominees of BNPL have been introduced to the board of BSL and the existing directors of BSL have reportedly stepped down from its board accordingly to the terms of the approved resolution plan.
“As per the resolution plan approved by NCLT, BNPL shall be classified as the promoter of BSL, and the existing promoters/promoter group shall be re-classified from promoters/promoter group to public shareholders of BSL for the purposes of SEBI…” Tata Steel claimed.