By Our Correspondent
NEW DELHI/BHUBANESWAR: Few hours after JSW Group Chairman, Sajjan Jindal’s tweet, Parth Jindal, who heads JSW Cement, on Saturday morning expressed his happiness after his the Group successfully acquired Odisha based Bhushan Power and Steel Limited, earlier held by Sanjay Singhal.
“Now one can officially say that East or West – @jswsteel is the best! Proud that the flagship company of the group has entered the mineral rich state of Odisha – with @JSWCement and JSW Infra already present and soon @JSWPaints the Eastern side of India is a big pillar for growth,” Parth Jindal tweeted @ParthJindal11.
“3 years of legal hurdles and challenges but super proud to welcome Bhushan Power and Steel to the @TheJSWGroup family – with our largest acquisition till date @jswsteel has cemented its place as the largest steel producer in India – very proud of all who made this possible,” Parth Jindal tweeted @ParthJindal11.
Earlier, JSW Group Chief Sajjan Jindal has tweeted about the BPSL acquisition. “Very proud that with the acquisition of Bhushan Power and Steel Ltd., we have made our entry in Odisha-East India and are now the country’s leading Steel Maker.On behalf of all @TheJSWGroup. I am happy to welcome the employees of #BPSL to the JSW Family!,” JSW Steel Chairman Sajjan Jindal tweeted@sajjanjindal.
In Odisha, JSW had started operations at 4 major blocks Nuagaon,Narayanposhi, Ganua and Jajang, which having a total ore reserve of 1,138.34 million tonnes. With the 4 Mines, an iron ore reserves linkage of more than 1,100 million tonnes has been secured for JSW Steel of Sajjan Jindal.
JSW Steel Ltd implemented the resolution plan to take over Bhushan Power & Steel Ltd., weeks after the lenders agreed to terms set by the Sajjan Jindal-founded company for purchasing the assets of the insolvent steelmaker. To complete the takeover, Rs 8,614 crore was arranged in a wholly owned subsidiary Piombino Steel Ltd. through a mix of equity, optionally convertible instruments to JSW Steel and JSW Shipping & Logistics Pvt., and the debt availed by PSL Funds, according to an exchange filing.
The PSL Funds received a total equity infusion of Rs 5,087 crore by JSW Steel in the form of equity and optionally convertible instruments. Of the total amount in PSL Funds raised through debt and equity, Rs 8,550 crore was invested into Makler Pvt. Ltd., a special purpose vehicle, through equity, convertible instruments. Finally, the SPV would be merged with the insolvent steel mill. The resolution plan also includes a repayment of Rs 19,350 crore to the financial creditors of Bhushan Power.
On March 5, 2021, a majority of the financial creditors to Bhushan Power voted in favour of JSW Steel’s offer for the sale on a provisional basis, BloombergQuint had reported citing two people with direct knowledge of the matter. JSW Steel’s resolution plan was approved by the National Company Law Tribunal in September 2019. But a month later the Enforcement Directorate attached Bhushan Power’s assets worth Rs 4,000 crore. That jeopardised the insolvency resolution until December 2019, when the central government amended the Insolvency and Bankruptcy Code to provide that criminal proceedings against former promoters not affect a resolution applicant when acquiring a stressed firm.
The National Company Law Appellate Tribunal in February 2020 vacated the attachment of Bhushan Power’s assets and approved JSW Steel’s bid for the company. But the Enforcement Directorate moved the Supreme Court to argue that the IBC amendment should not apply to this case. While it the Bhushan Power matter is pending, JSW Steel in the filing cited Supreme Court’s ruling in a separate case (Manish Kumar v/s Union of India) where it upheld the constitutional validity of the Section 32A of the IBC, saying new owners can’t be held liable for actions of the previous management.Bhushan Power was part of the first list of 12 companies that the Reserve Bank of India identified for immediate referral for bankruptcy proceedings in 2017.
