Bhushan Power’s acquisition by JSW Steel still hangs on fire

The much prolonged resolution of Bhushan Power and Steel Ltd, is stuck in its last leg as JSW Steel is not ready to pay the resolution amount unless the Enforcement Directorate (ED) releases the attached assets of the insolvent company.

Sources said that in the past few months during the pandemic, the lenders of BPSL, led by the State Bank of India have written to the JSW Steel seeking the resolution amount of Rs 19,700 crore as allowed by the National Company Law Appellate Tribunal (NCLAT) in February, along with immunity from prosecution by the ED.

ED has so far attached assets worth over Rs 4,000 crore of Bhushan Power.

The top court has directed the Committee of Creditors that if JSW Steel pays the amount but ends up losing it, the lenders should return the money. The company, however, is not relenting on paying the amount without release of the attached assets.

A JSW official said: “Pending adjudication of appeals and CoC application before SC the plan is incapable of implementation more so when the assets of BPSL are continued to be attached by the ED.”

While the Supreme Court has not stayed the implementation of the resolution plan, it admitted Singhal’s plea. The matter was last heard on June 10, when the court directed all parties, including ED, to file additional documents within two weeks.

Sanjay Singhal, the former promoter of BPSL also moved the Supreme Court against the NCLAT approval to the JSW Steel’s offer and the top court admitted Singhal’s plea.

The matter will be next heard on July 6, when the stakeholders would get further clarity on the matter and if the clarity does not emerge, the saga of one of the most high profile resolution cases under the Insolvency and Bankruptcy Code (IBC) may stretch further.

The matter was last heard on June 10, and the court directed all parties, including ED, to file submissions to the court within two weeks in response to the application filed by JSW Steel.

After the NCLAT approved the JSW Steel’s resolution plan in February, the deadline for paying the amount was March 17.

The Sajjan Jindal-led JSW Steel has had to face a number of challenges apart from the usual competition in terms of bids and resolution plans.