The National Company Law Appellate Tribunal (NCLAT) today declined to stay Tata Steel's acquisition of Bhushan Steel under the corporate insolvency resolution process and issued notices to Tata Steel, the resolution professional and Committee of Creditors (CoC) of Bhushan Steel on the petition filed Singal challenging the sale.
The Tata Steel acquisition of debt-laden Bhushan Steel comes as a success story for the Reserve Bank of India (RBI) and government who are busy tackling banking systems one key problem massive stressed assets through Insolvency & Bankruptcy Code (IBC).
"Liquidation value of Bhushan Steel was Rs 14,541 crore but creditors received nearly four times the amount".More news: Unveiled design concept BMW iNEXT
Kumar said following the Bhusan Steel buyout, public sector banks (PSBs) will write back Rs 7,500 crore of loans which were earlier classified as NPAs.
"Lenders recovered nearly entire principal loan of Bhushan Steel through Rs 36,400 crore transparent bid by Tata Steel and also got 12 per cent stake in the company".
The board of Bhushan Steel approved the sale of 74.99 shares to Tata Steel's wholly-owned subsidiary Bamnipal Steel Ltd for almost Rs 159 crore, the company said in its filing with the stock exchanges. This will boost employment & the economy even more, he said further. "The bridge loan availed by BNPL is expected to be replaced by debt raised at BSL over time", it said.More news: Congress, RJD to stake claims to form Goa, Bihar governments
He added that the Narendra Modi government was "systematically cleaning the financial and economic mess left behind by the Congress".
"Cleaning up banks and resolving NPAs is part of Congress-mukt Bharat (Congress-free India)".
"The admitted CIRP cost and employee dues have been paid as required under IBC".More news: Washington Sanctions Venezuela's Cabello For Drug Trafficking, Florida Companies Hit
However, insolvency proceedings were taken against the company on 26 July 2017 under the Insolvency and Bankruptcy Code, 2016 and the company suffered a lot. These accounts together have total outstanding loan of Rs 1.75 lakh crore. Meanwhile, banking secretary Rajiv Kumar said on Friday that the resolution process will help a total of 53 domestic and worldwide lenders. Additionally, Rs 100 crore has been paid by BNPL to the financial creditors of Bhushan Steel.