Tata Steel bags Bhushan Steel in NCLT auction

Tata Steel bags Bhushan Steel in NCLT auction

A day after Tata Steel was declared the highest bider for acquiring stressed assets of Bhushan Steel, Larsen & Toubro Ltd has moved the National Company Law Tribunal seeking higher priority in getting its dues from the latter.

The engineering and construction company had bagged INR 1,205 crore order from Bhushan Steel for construction related work at the latter's Odisha plant in September 2007.

The NCLT has asked the resolution professionals to share their stand on the matter and has listed L&T's plea in Bhushan Steel case on March 23. Tata Steel has offered to pay Bhushan Steel's financial creditor ₹35,200 crore, while operational creditors will get ₹1,200 crore.

Tata Steel gained 39 percent, while Bhushan Steel declined 38 percent in the last 9 months.

Bhushan Steel has an annual production capacity of 5.6 million tons, and will add significantly to Tata Steel's 13 million tons. The liquidation value of Electrosteel Steels is Rs 2,900 crore.

Sale of debt-laden Bhushan Steel, which is one of the largest non-performing assets in the country, is credit positive as it will help improve banks' asset quality metrics and set precedent for resolution of other non-performing assets, particularly in the steel sector, Moody's Investors Service said on Friday.

Essar Steel Ltd, another company with a heap of sour loans owed to banks, has seen heightened interest and aggressive bidding from world's biggest steelmaker ArcelorMittal and a consortium led by Russian bank VTB, according to media reports. In fact, PNB reportedly had an exposure of close to Rs 5,000 crore, much of which will now come back to coffers and help it to partly offset the damage allegedly wrought by Nirav Modi over the past seven years.



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