MUMBAI: Lenders to Bhushan Power have accepted
’s Rs 19,350-crore resolution plan for the stressed asset. They have also agreed to refund the money in case of an adverse order by the Supreme Court (SC) in relation to the litigations filed by Bhushan Power’s founder against JSW. The lenders’ agreement is in line with the apex court’s last March order that said if
makes the payment for Bhushan Power and loses the case, then the lenders will have to return the entire amount to the company.
JSW will be depositing the sum in an escrow account managed by a leading PSU bank over the next two weeks. JSW Steel declined to comment on the report. If the Bhushan Power deal concludes successfully, then JSW will be ahead of Tata Steel in terms of production capacity in India. Rival Tata Steel had acquired
(which was promoted by Bhushan Power founder’s brother) through the bankruptcy route in 2018.
Three applications — two filed by Bhushan Power founder Sanjay Singhal against JSW and one filed by the
) against an NCLAT order — are pending before the SC. Singhal has opposed JSW’s deal on the ground that the latter was a joint venture partner for a coal mine permit and a related party of Bhushan Power is barred from bidding for a stressed asset under bankruptcy rules.
This, however, was dismissed by the NCLAT after it found that the partnership was formed based on government criterion for allocation of coal blocks and there were three partners including a PSU in the JV. Singhal has challenged the NCLAT order in the SC. He has also challenged another NCLAT order that allowed JSW to retain Bhushan Power’s profits earned during the insolvency proceedings before the SC. Singhal wanted the earnings to go to Bhushan Power’s lenders.
Bhushan Power has seen positive operating profit throughout the proceedings on the back of robust metal prices. Besides Singhal, the ED has also challenged an NCLAT order that exempted Bhushan Power from all criminal acts done by its founder after it becomes a part of JSW. The ED had seized Bhushan Power’s assets in connection with a money laundering probe against Singhal. So, until the SC gives its verdict, uncertainty looms over the JSW-Bhushan Power deal.