The National Company Law Tribunal (NCLT) on 30 May 2019 approved the resolution plan of Tata Steel to acquire debt-ridden Bhushan Energy Ltd for around Rs 800 crore. The principal bench of NCLT Delhi also rejected objections from Bhushan Energy’s former promoter Neeraj Singal opposing Tata Steels’ bid.
Under the resolution plan, Tata Steel will offer an upfront payment of Rs 730 crore. It would also pay Rs 50 crore additionally to operational creditors of the company. Tata Steel had offered Rs 35,200 crore in cash to acquire Bhushan Steel besides Rs 1,200 crore to creditors and convert the remaining debt owed to banks to equity.
Incorporated in 2005, Bhushan Energy is based in Dhenkanal, Odisha. In FY2015-16, Bhushan Energy had reported a gross debt of Rs 2,336 crore. Besides, Tata Steel would also infuse Rs 367 crore into the company as a part of equity infusion. A detailed order is still awaited in this matter. The order was pronounced by NCLT on 30 May 2019.
Earlier in June 2018, in this matter, NCLT had extended the insolvency resolution period for 90 days after the creditors failed to find a suitable buyer within the initial period of 180 days as mandated under the Insolvency & Bankruptcy Code (IBC).