News

Bhushan Power & Steel lenders ask Tatas to revisit conditions

New Delhi: The consortium of lenders to Bhushan Power & Steel has asked Tata Steel to waive certain conditions in its offer for the company and rejected a late bid by the UK’s Liberty House, people briefed on the matter said.

Liberty House’s bid was rejected because it was submitted on Tuesday, past the February 8 deadline. Liberty House may approach the National Company Law Tribunal to consider its bid, they said.

A Liberty House spokesperson declined comment in response to ET’s queries. Tata Steel’s offer of Rs 24,500 crore beat rival JSW Steel’s bid, making it the front-runner to acquire Bhushan Power & Steel, ET reported on Monday.

The Tata offer is conditional on lenders buying the entire equity of two Bhushan Power subsidiaries – BSE-listed Nova Iron & Steel, with a market capitalisation of about Rs 30 crore, and Ambey Steel & Power, which has a net worth of Rs 60 crore.

At a meeting of the creditors on Wednesday, the lenders said this condition was not reasonable, a banker briefed on the matter said. Tata Steel has been asked to revisit its conditions and come back with a final offer later this week.

T ata Steel offered an upfront cash payment of Rs 17,000 crore to the lenders of unlisted Bhushan Power & Steel, which is owned by Sanjay Singhal, an estranged member of the family that also owns Bhushan Steel. It offered an additional cash infusion of Rs 7,000 crore in the company for working capital and payments to operational creditors and employees.

Tata Steel also proposed to write off the entire equity of Bhushan Power and issue fresh equity to itself. The lenders have not been offered any equity in the company.

JSW Steel offered Rs 11,000 crore to the lenders in upfront payment, some equity in Bhushan Power and a cash infusion of Rs 2,000 crore as working capital.

Bhushan Power & Steel owes lenders a little over Rs 48,000 crore. Punjab National Bank is the lead lender, although SBI has disbursed the highest proportion of loans.