Tata group firm acquires Bhushan steel: Historic breakthrough in bad loan resolution, says Goyal

Also read | First under insolvency code: Bhushan Steel bought by Tata Steel

“Lenders recovered almost entire principal loan of Bhushan Steel through Rs 36,400 crore transparent bid by Tata Steel and also got 12 per cent stake in the company,” he said on Twitter.

“This is a record step towards resolving the legacy of unprecedented amount of bad bank loans inherited by this Government,” he added. He further said the NPA resolution process is being done through a fair and transparent IBC.

The government under the leadership of PM Narendra Modi has been systematically cleaning the financial & economic mess left behind by the Congress, he tweeted. “Liquidation value of Bhushan Steel was Rs 14,541 crore but creditors received almost four times the amount. This was possible due to the robust and transparent Insolvency & Bankruptcy Code brought by this Government…” Goyal tweeted. With recovery of NPAs, banks will now be in a position to offer more and affordable credit to major sectors of the economy especially the MSME sector. This will boost employment & the economy even more, he added. Meanwhile, banking secretary Rajiv Kumar said on Friday that the resolution process will help a total of 53 domestic and international lenders.

Principal economic advisory in the finance ministry Sanjeev Sanyal said that not only did Tatas buy BSL, the recovery amount is over 90 per cent of the principal amount. Most of this will now go back to the banks and start their recovery, he said and added more such resolutions are expected soon. “A historic moment! Tata buys Bhushan Steel for Rs 36k crores + 12 pc equity. Cheque handed over. First big case fully resolved under IBC. This is as important as 1991 in our economic history,” Sanyal said on Twitter. The total claims of financial creditors were Rs 56,018 crore and that of operational creditors of Rs 843 crore while the Liquidation value for Bhushan Steel was Rs 14,541 crore.

“BNPL has successfully completed the acquisition of controlling stake of 72.65 per cent in BSL in accordance with the approved resolution plan under the Corporate Insolvency Resolution Process (CIRP) of the Insolvency and Bankruptcy Code 2016 (IBC) which has been managed by Vijaykumar V lyer, Partner, Deloitte Touche Tohmatsu India LLP, in his capacity as the resolution professional,” Tata Steel said.

The admitted CIRP cost and employee dues have been paid as required under IBC, it said. Further, settlement of the amounts equivalent to Rs 35,200 crore towards financial creditors of BSL is being undertaken as per the terms of the resolution plan and corresponding transaction documents, the company said. Tata Steel said Rs 1,200 crore will be paid to operational creditors of BSL over a period of 12 months as per their admitted claims and as per the terms of the approved resolution plan.

“The investment from BNPL in BSL has been done through a combination of equity of Rs 158.89 crore and inter-corporate loan of Rs 34,973.69 crore. Additionally, Rs 100 crore has been paid by BNPL to the financial creditors of BSL as consideration for novation of remaining financial debt of BSL.