JSW Steel Ltd implements resolution plan submitted for Bhushan Power & Steel Limited

Bhushan Power & Steel Limited ("BPSL") was admitted to insolvency vide order of the National Company Law Tribunal, New Delhi bench dated July 26, 2017, under the provision of the Insolvency & Bankruptcy Code 2016. The resolution plan submitted by JSW Steel Ltd (company) was approved by the National Company Law Tribunal, Principal Bench, New Delhi by its order order dated September 5, 2019 and by the National Company Law Appellate Tribunal by its order dated February 17, 2020.

The cost of acquisition is equity shares for Rs. 100,00,00,000 and compulsory convertible debentures for INR 8450,00,00,000 have been issued by BPSL to Piombino Steel Ltd.

As on March 26, 2021, the company holds 100% equity shares of Piombino Steel Ltd. (PSL) The company and JSW Shipping and Logistics Private Limited have also invested in optionally convertible instruments of Piombino Steel Ltd which are convertible to equity shares at par.

A sum of Rs. 8,614 crores in aggregate was arranged in PSL, currently a wholly owned subsidiary of the company, through a mix of equity issued to the company, optionally convertible instruments (convertible to equity shares at par) issued by the company and JSW Shipping & Logistics Private Ltd (JSLPL) and debt availed by PSL (PSL Funds). The PSL Funds included a total infusion of Rs. 5087 crores by the company in the form of equity and optionally convertible instruments.

Of the PSL Funds, an amount of Rs. 8850 crores were invested in Makler Private Limited (SPV) through equity and convertible instruments. The SPV also availed short term loans.

Pursuant to the implementation of resolution plan, that included payment of Rs. 19,350 crores to the financial creditors of BPSL and merger of SPV with BPSL, Piombino Steel Ltd holds 100% of the equity share capital of BPSL. It holds 10 crore equity shares of Rs. 10 and Rs. 8450 crores compulsory convertible debentures of Rs. 10 each.

BPSL is an unlisted public company in the business of manufacturing iron & steel products. BPSL has an integrated steel unit with liquid steel capacity of more than 2.5 MTPA in Jharsuguda, Odisha. The company manufactures iron & steel products including billets, HR Coils, CR Coils. The downstream facilities are located in Kolkata and Chandigarh.

The turnover of BPSL for the year ended March 31, 2020 is Rs. 8635.14 crores.

The acquisition is part of inorganic growth strategy of the company. Through this acquisition the company will establish its presence especially in Flat Steel business in the eastern region of India.

Pursuant to the subscription and shareholders agreement between the company, JSW Shipping & Logistics Private Limited ("JSLPL") and Piombino Steel Limited ("PSL"), JSLPL converted the optionally convertible debentures held by JSLPL in PSL into equity shares of PSL on 27.03.201. Pursuant to the conversion, JSLPL holds 51% equity in PSL and the Company holds 49% equity in PSL. JSLPL and the Company will jointly control and manage SPSL through PSL. The Company continues to hold the optionally convertible instruments (convertible to equity shares at par) issued to the Company by PSL.

Shares of JSW STEEL LTD. was last trading in BSE at Rs.444.95 as compared to the previous close of Rs. 438.05. The total number of shares traded during the day was 432420 in over 5706 trades.

The stock hit an intraday high of Rs. 452.3 and intraday low of 436.4. The net turnover during the day was Rs. 192366068.

Source : Equity Bulls

Keywords