JSW Steel sweetens offer for BPSL by Rs 400 crore

Mumbai: Sajjan Jindal-led JSW Steel has sweetened its offer to lenders of Bhushan Power & Steel, agreeing to make an upfront payment of Rs 19,350 crore plus an additional Rs 400 crore, thus taking the deal size to Rs 19,750 crore.
“We have received a fresh offer in which JSW Steel has agreed to make an upfront payment for Bhushan Power & Steel; also the offer has been hiked by Rs 400 crore," said a lender involved in the negotiations.

This is a complete U-turn from the company’s stance a few months ago when it was asking for more time to close the deal, the person said.

The company had in June sought an extension till March next year for the full payment, citing the pandemic. With the steel industry seeing a surge in demand, the company is now confident of making this upfront payment. The lenders had intimated JSW Steel that they would take "appropriate steps” if it did not implement the resolution plan for Bhushan Power & Steel in two weeks.

The proposal is on the table and is yet to be accepted by the lenders.

“Yes, a fresh offer has been received which is better than the last offer; the committee of creditors is yet to deliberate on it and decide whether all are on board with the new deal or wish to wait for the proceedings in the Supreme Court,” said another lender.

The company declined to comment.

Bhushan Power & Steel was among the first 12 large corporate accounts identified by the Reserve Bank of India for immediate referral to the Insolvency and Bankruptcy Board. It had total debt of Rs 44,885 crore.

JSW Steel was chosen as the winning bidder for its assets in September 2019. The company had offered to pay Rs 19,350 crore to the financial creditors, with the lenders taking nearly a 60% haircut on the dues. Apart from this, JSW had offered to pay Rs 350 crore to operational creditors against their admitted claims of Rs 700 crore.

However, it failed to conclude the deal after the Enforcement Directorate attached an estimated Rs 4,000 crore worth of Bhushan Power & Steel’s assets in Odisha under the provisions of the Prevention of Money Laundering Act. JSW Steel had sought immunity from all these cases.

JSW Steel said earlier that it expected the Supreme Court to give its final verdict at the earliest in the Bhushan Power & Steel insolvency case to help it conclude the deal before 2021. Meanwhile, the company has already completed acquisitions of two other bankrupt firms, Monnet Ispat and Asian Colour Coated.