JSW Steel gets NCLT's Approval to acquire Bhushan Power and Steel

The wait is finally over for JSW Steel to acquire Bhushan Power and Steel Ltd (BPSL) as NCLT (National Company Law Tribunal) has finally given a go-ahead to the former’s bid of INR 19,700 crore for BPSL.

With this, JSW Steel has acquired the second asset in steel sector under insolvency process. Prior to this in Jul’18, the consortium of JSW Steel and Aion Capital Partners bought Monnet Ispat & Energy Ltd. under the bankruptcy process.

BPSL that has a total debt of INR 47,000 crore will add 3.5 MnT a year of capacity to the Sajjan Jindal-led mill’s operations and establish the Mumbai-based company’s footprint in the eastern part of the country as BPSL’s plant is located in Odisha.

BPSL was one of the 12 companies that had been pushed into the IBC by the RBI. In the first round of bidding Liberty House had submitted a bid of Rs 18,500 crore, Tata Steel had submitted a bid of Rs 17,000 crore while JSW Steel had submitted a bid of Rs 11,000 crore. JSW Steel later revised its bid higher to Rs 19,700 crore. Tata Steel had challenged JSW's revised bid in NCLAT but this plea was dismissed in February this year and JSW Steel was declared the highest bidder by the Committee of Creditors (COC) in February itself.
The NCLT’s has mentioned in its decision that the profits made by Bhushan Power during insolvency period must be distributed to creditors, in accordance with a ruling by a higher tribunal in a case involving ArcelorMittal-Essar Steel India Ltd.

With BPSL’s acquisitions, JSW Steel will move closer to reach its goal of increasing its capacity to 45 MnT and have overseas capacity of 10 MnT by 2031.

Indian steel industry is undergoing a complete makeover under the new bankruptcy process. In time span of two years, apart from JSW-BPSL acquisition, Anil Agarwal’s Vedanta has acquired Electrosteel Steels Ltd, Tata Steel boosted its capacity with the acquisition of Bhushan Steel and Arcelor Mittal won the biggest steel plant under the insolvency process, Essar Steel India Ltd. which is yet to get control due to legal challenges.