Under the process of the Indian Bankruptcy and Insolvency Code, India’s National Company Law Tribunal (NCLT) has approved a $2.7 billion takeover of Bhushan Steel and Power Limited (BSPL) submitted by domestic steel producer JSW Limited, according to ruling announced by the NCLT on Thursday, September 5.
In the ruling, the NCLT directed that profits made by BSPL during the insolvency period should be distributed to creditors.
The takeover of BSPL will add 3.5 million mt capacity to JSW’s existing 18 million mt per year steelmaking capacity.
JSW’s bid for the takeover of BSPL will not be affected by alleged fraud of around $777 million nor will the sale be affected by criminal proceedings currently underway against former promoters of BSPL, the NCLT said in its ruling.
The acquisition of BSPL would also give JSW Limited a footprint in eastern India with BSPL’s existing steelmaking facilities located in the eastern iron ore-rich state of Odisha.
This is JSW Limited’s second acquisition of bankrupt steel company under insolvency proceedings, having concluded the acquisition of ailing steel producer Monnet Ispat Limited with a capacity of 1.5 million mt last year, in a consortium bid with Apollo Global Management LLC and backed by Aion Capital Partners.