JSW Steel set to acquire Bhushan Power and Steel
Steel

JSW Steel set to acquire Bhushan Power and Steel

West Wave Maritime and Allied Services Pvt Ltd, a promoter group entity belonging to JSW Group, has raised Rs 2,500 crore via non-convertible debentures, tying up the last mile funding for the acquisition of Bhushan Power and Steel Ltd (BPSL).

JSW Steel plans to close the Rs 19,700 crore deal by March 31. The process will involve transferring the amount articulated in the resolution plan to the creditors, largely consisting of state-run banks and financial institutions.

Sources told the media that the entire acquisition would be funded by borrowing, at least for now. JSW would look to bring in equity only at a later date. The entire bulwark will be done by JSW alone, unlike in the case of Monnet Ispat, where it was only a minority equity partner.

BPSL is one of the 12 large companies which were sent to the bankruptcy court by a diktat of the Reserve Bank of India (RBI) in 2017. After an event of twists and turns, JSW emerged as the highest bidder for the company, which operates a 2.8 million tonne steel plant in Odisha.

Monnet Ispat, which was also on the list of the 12 companies, was acquired by JSW in association with AION Capital, which picked up a 74% stake. However, the Jindals appear to be going alone for BPSL.

The arrangement to finance the entire transaction by debt comes in the background of the conditional payment JSW will make to the financial creditors. At least two court cases, one by the Enforcement Directorate and another by erstwhile promoter Sanjay Singhal, are still pending in the Supreme Court, which may throw a spanner to the resolution plan.

The committee of creditors agreed on March 5 that they would return the money paid by JSW in the case of an adverse judgment by the apex court, which may restrain the execution of the resolution plan. Financial creditors with a share of 97% of the total debt exposure voted in favour of this arrangement.

The State Bank of India (SBI) will be the biggest beneficiary having Rs 9,825.67 crore admitted claim, followed by Punjab National Bank’s Rs 4,399 crore. An asset reconstruction firm has a debt of Rs 5,275 crore, while Canara Bank and Allahabad Bank have Rs 2,244 crore and Rs 2,130 crore debt, respectively.

Apart from the steel plant in Odisha, unlisted BPSL owns a power plant and several downstream units across north India.

Image Source


Also read: JSW Steel to raise Rs 7k cr for BPSL acquisition

West Wave Maritime and Allied Services Pvt Ltd, a promoter group entity belonging to JSW Group, has raised Rs 2,500 crore via non-convertible debentures, tying up the last mile funding for the acquisition of Bhushan Power and Steel Ltd (BPSL). JSW Steel plans to close the Rs 19,700 crore deal by March 31. The process will involve transferring the amount articulated in the resolution plan to the creditors, largely consisting of state-run banks and financial institutions. Sources told the media that the entire acquisition would be funded by borrowing, at least for now. JSW would look to bring in equity only at a later date. The entire bulwark will be done by JSW alone, unlike in the case of Monnet Ispat, where it was only a minority equity partner. BPSL is one of the 12 large companies which were sent to the bankruptcy court by a diktat of the Reserve Bank of India (RBI) in 2017. After an event of twists and turns, JSW emerged as the highest bidder for the company, which operates a 2.8 million tonne steel plant in Odisha. Monnet Ispat, which was also on the list of the 12 companies, was acquired by JSW in association with AION Capital, which picked up a 74% stake. However, the Jindals appear to be going alone for BPSL. The arrangement to finance the entire transaction by debt comes in the background of the conditional payment JSW will make to the financial creditors. At least two court cases, one by the Enforcement Directorate and another by erstwhile promoter Sanjay Singhal, are still pending in the Supreme Court, which may throw a spanner to the resolution plan. The committee of creditors agreed on March 5 that they would return the money paid by JSW in the case of an adverse judgment by the apex court, which may restrain the execution of the resolution plan. Financial creditors with a share of 97% of the total debt exposure voted in favour of this arrangement. The State Bank of India (SBI) will be the biggest beneficiary having Rs 9,825.67 crore admitted claim, followed by Punjab National Bank’s Rs 4,399 crore. An asset reconstruction firm has a debt of Rs 5,275 crore, while Canara Bank and Allahabad Bank have Rs 2,244 crore and Rs 2,130 crore debt, respectively. Apart from the steel plant in Odisha, unlisted BPSL owns a power plant and several downstream units across north India. Image Source Also read: JSW Steel to raise Rs 7k cr for BPSL acquisition

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