The Supreme Court’s direction for the liquidation of Bhushan Power and Steel may again hold the interest of major domestic and international steel manufacturers considering expanding capacity in the country. People who know the matter have predicted this.
The company, which was at some time as a major acquisition under the country’s debt code, received dialects from Tata Steel and Liberty House in Britain during the first bankrupt auction process. It was eventually acquired by JSW Steel. The operation of Bhushan Power under JSW increased from 27.5 lakh tonnes to 45 lakh tonnes.
A banker said, “All major steel companies operating in India, including global major companies, can evaluate this asset. However, he also said that it is too early to say anything. Sources familiar with the case said that Jindal Steel and Power, led by Naveen Jindal, can also offer a proposal.
According to legal experts, JSW Steel, owned by Sajjan Jindal, may also bid for the assets of Bhushan Power and Steel in the auction under the liquidation process.
Rahul Dwarkadas, a co-founder and senior partner of Veritas Legal and senior partner, said, “According to the liquidation process, a proposal for liquidation assets will be sought, which may be in the form of public auction or personal sales or an existing purpose.” Its purpose is to maximize the value of each asset so that the creditors can be paid. There is no restriction on the participation of JSW Steel, until the Supreme Court has made some observation.
At the time of IBC auction in March 2021, JSW Steel paid Rs 19,700 crore to the lenders out of a total loan of Rs 47,200 crore of Bhushan Power.
Fresh auction may take time and is unlikely to occur without any fluctuations. According to industry experts, the Supreme Court’s decision to cancel the year -old acquisition will lead to restlessness among potential investors. Ketan Dalal, the founder of the advisory company Catalist Advisors, said, “This decision gives rise to basic concerns.” He said, “When a big transaction is overturned after many years, it creates uncertainty – especially in relation to employees, creditors and downstream investors, who worked on the basis of validity of acquisition.”
He said that this matter can set an example in India’s insolvency solution structure and can change the trust of investors in long -fixed deals. Dalal said that potential bidders also want clarity and they do not want any uncertainty regarding litigation risk. According to the broker, the liquidation process is not very easy in itself and each asset has to be sold separately.
First Published – May 4, 2025 | 10:53 PM IST
Related post