30 May 2019: The principal bench of the National Company Law Tribunal (NCLT) on Thursday approved Tata Steel’s nearly Rs 800-crore bid to acquire Bhushan Energy. The NCLT, while approving this bid, also rejected Bhushan Energy’s former promoter Neeraj Singhal’s objections to Tata Steel’s bid for the debt-laden company.
As part of the plan, Tata Steel will offer an upfront payment of Rs 730 crore, while it will pay an additional Rs 50 crore to operational creditors of the company. A further sum of Rs 367 crore will be infused by Tata Steel in the company as a part of equity infusion, depending on the prevalent market conditions. Till the time Tata Steel takes over the company and starts running it, the Committee of Creditors and the resolution professional of the company will act as monitoring agency to oversee the day to day functioning of the company, the NCLT said. A detailed copy of the order is awaited.
Bhushan Energy was taken to the NCLT by State Bank of India (SBI) for not paying its dues worth Rs 500 crore. On June 6, the NCLT allowed an extension of 90 days for the company to find a resolution plan when it failed to find any within the 180-day moratorium. Incorporated in 2005, Bhushan Energy is based in Dhenkanal, Odisha. It is an arm of Bhushan Steel. Bhushan Energy had reported a gross debt of Rs 2,336 crore in 2015-16 (April-March).
The NCLT had in June last year extended the insolvency resolution period for Bhushan Energy by 90 days beyond the initial period of 180 days after the lenders to the company had failed to zero in on one bidder for the company.