Tata Steel, through its wholly-owned subsidiary Bamnipal Steel Limited (BNPL), has acquired a controlling stake in the debt-laden Bhushan Steel. The steel producing arm of salt-to-software conglomerate got 72.65 percent stake in Bhushan Steel. Under this acquisition, Tata Steel acquired 79 crore share at Rs 2 each.
"Tata Steel Limited hereby announces that Bamnipal Steel Limited (BNPL), a wholly-owned subsidiary of Tata Steel has successfully completed the acquisition of controlling stake of 72.65% in Bhushan Steel Limited (BSL) in accordance with the approved Resolution Plan under the Corporate Insolvency Resolution Process (CIRP) of the Insolvency and Bankruptcy Code 2016 (IBC) which has been managed by Mr. Vijaykumar V. Iyer, Partner, Deloitte Touche Tohmatsu India LLP in his capacity as the resolution professional," Tata Steel said in a BSE filing.
In its statement, Tata Steel assured that all necessary approvals, like from Competition Commission of India (CCI) and National Compan Law Tribunal (NCLT), have already been secured. The admitted CIRP cost and employee dues have been paid, as required under IBC, said the company.
Settlement of Rs 35,200 crores towards financial creditors of BSL is being carried out as per the terms of resolution plans and corresponding transaction documents. Additional Rs 1,200 crore will be paid to the operational creditors of BSL over the course of 12 months as per their admitted claims and as per the terms of the approved Resolution Plan, Tata Steel said in its statement.
"The investment from BNPL in BSL has been done through a combination of the equity of Rs 158.89 crore and inter-corporate loan of Rs 34,973.69 crore. Additionally, Rs 100 crore has been paid by BNPL to the financial creditors of BSL as consideration for novation of the remaining financial debt of BSL. The acquisition is being financed through a combination of an external bridge loan of Rs 16,500 crore availed by BNPL and balance amount through investment by Tata Steel in BNPL. The bridge loan availed by BNPL is expected to be replaced by debt raised at BSL over time," the company said in its statement.
Now that the acquisition is complete, the nominees of BNPL have been appointed on the Bhushan Steel after the existing directors of BSL have stepped down as per the approved resolution plan. As per the NCLT-approved resolution plan, BNPL has been named as the promoter of BSL and the outgoing promoters have been classified as public shareholders.
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