JSW Steel most likely winner for Bhushan Power

New Delhi: After facing stiff challenge from rival bidders, JSW Steel may finally emerge victorious in the battle for control of Bhushan Power & Steel (BPSL). Debt-ridden BPSL is facing insolvency proceedings for the past 15 months, a timeframe that far exceeds the mandated 270 days for resolution under the Insolvency and Bankruptcy Code (IBC).

Sources said the committee of creditors (CoC) for Bhushan Power has commenced e-voting process on resolution plans submitted by three bidders — Tata Steel, JSW Steel and Liberty House — on Monday. This will be open for the next 48 hours.

“If there are no more legal challenges to the process and there is no further rebidding, JSW offer of Rs 19,700 crore, the highest among the three, may be selected as preferred resolution applicant and sent to the National Company Law Tribunal (NCLT) for final approval. The outcome of CoC meeting may be known by Friday,” said a source.

Sources said CoC may wait till October 22 when Tata Steel’s plea challenging re-bids will come up for hearing before NCLT. But the Supreme Court's order in Essar Steel’s insolvency process has made it clear that CoC has the ultimate authority to decide a successful resolution applicant.

A representative of the UK-based Liberty House expressed ignorance about the CoC meeting, while Tata Steel and JSW Steel offered no official response.

Sources in Tata Steel and JSW Steel confirmed the CoC meeting and said a voting was required due to revised offer from JSW Steel after Tata Steel was declared successful resolution applicant in the earlier round.

Sources said in its revised bid given in August, JSW Steel increased its offer by close to 80 per cent to Rs 19,700 crore. This is the highest bid. Tata Steel and Liberty House offered Rs 17,000 and Rs 19,000 crore, respectively. Tata Steel did not revise its offer when bids were invited again under directions from the NCLAT.

Bhushan Power owes about Rs 45,000 crore to lenders and was referred to NCLT for insolvency resolution in June last year.

Tata Steel has also emerged as the higher bidder for Bhushan Steel (with an offer of Rs 32,000 crore), another group company facing insolvency process. It is thus keen even to acquire Bhushan Power that will offer increased synergy in operations.

BPSL is among the first list of 12 non-performing assets (NPAs) referred by the Reserve Bank of India for NCLT proceedings.

For JSW, acquisition of Bhushan Power would allow it to retain the numero uno position in the Indian market for a long time to come with targeted capacity of 40 million tonnes by 2030.

For Tata Steel, acquisition of Bhushan Power assumes strategic interest as it would synergise its steel operations in Eastern parts of the country where it already has plants in Jamshedpur and Kalinganagar (Odisha). Bhushan Steel’s acquisition further strengthened its position in the market.

But for both the companies, BPSL’s acquisition would add pressure on their already high levels of debt. JSW has a total debt of about Rs 45,000 crore, while Tata Steel is sitting on a debt to the tune of about Rs 76,000 crore.