JSW Steel has pipped Tata Steel at the post to emerge as the highest bidder for the stressed Bhushan Power and Steel.
JSW Steel revised its bid from the earlier ₹19,000 crore to ₹19,700 crore on Monday, while Tata Steel surprisingly retained its initial bid of ₹17,000 crore. UK-headquartered Liberty House increased its bid by ₹500 crore to ₹19,000 crore, said sources close to the development.
Tata Steel had emerged the winner in the first round of bidding. But the National Company Law Appellate Tribunal (NCLAT) directed Bhushan Power’s Committee of Creditors (CoC) to go for rebids after the other firms expressed a wish to increase their offers.
Tata Steel’s move
Tata Steel had appealed to the Supreme Court against the NCLAT decision to consider revised bids. However, the apex court refused to stay the NCLAT order.
The CoC will now submit the leading bids — of JSW Steel and Liberty House — to NCLAT, which will then approve the highest bidder’s proposal on August 17.
JSW Steel has also provided SBI’s guarantee to fund the acquisition.
With the buyout of Bhushan Power, JSW Steel will retain its position as the country’s largest private sector steel producer with a capacity of 22 mtpa while Tata Steel, with a capacity of 19 mtpa, will remain the second largest.
Tata Steel had earlier acquired Bhushan Steel through the Insolvency and Bankruptcy Code (IBC) process.
Stiff competition
JSW can now enhance Bhushan Power’s capacity quickly to 5 mtpa from 3.5 mtpa with an investment of ₹1,500 crore.
The gap between JSW Steel and Tata Steel will remain more or less the same even after the fresh capacity addition comes on stream over the next 5-8 years, according to industry experts.
Tata Steel had beaten JSW Steel to bag the 5 mtpa capacity Bhushan Steel with its bid of ₹35,000 crore. On the other hand, JSW Steel had bagged Monnet Ispat and Power for ₹2,800 crore.
Bhushan Power and Steel is a producer of flat and long steel products, with plants located in Chandigarh, Derabassi, Kolkata and Odisha.