 "Lenders created fresh charge on Bhushan plant in July")
While 16 members of a 24-bank working capital consortium offered additional limits to the steel maker, Syndicate Bank was among the seven that didn’t provide these. Federal Bank reduced its exposure from Rs 100 crore to Rs 50 crore.
These details are part of a fresh mortgage deed executed on July 16, according to a filing with the Ministry of Corporate Affairs (MCA). The filing was made by the company on August 8, six days after the arrest of Jain and a day after the arrest of Neeraj Singhal, Bhushan Steel’s vice-chairman. (LOSS OF CREDIT?)
On August 2, Jain was arrested by the Central Bureau of Investigation for allegedly taking a bribe of Rs 50 lakh to increase the credit limit of some companies, in violation of banking rules.
ALSO SEE: The table giving the blow-by-blow account
“The total amount of loan secured by the property of Bhushan Steel Ltd at Khapoli = (a) security already created + (b) security being created now; (a)+(b) = Rs 36,853.42 crore”, the filing said.
Liabilities for which the fresh charges were made included a Rs 200-crore corporate loan by Syndicate Bank, Rs 200 crore towards non-convertible debentures placed with Life Insurance Corporation of India and Rs 557 crore towards external commercial borrowings sanctioned by State Bank of India. The additional working capital limits totalled Rs 2,826 crore.
Indian Overseas Bank and State Bank of Mysore, which hadn’t extended working capital loans earlier, provided fresh limits of Rs 250 crore and Rs 150 crore, respectively.
The mortgage deed, executed by ICICI Bank on behalf of all banks, described the mortgaged property as “land admeasuring 4,525.1 gunthas, equivalent to 113.13 acres, situated at villages Nifan, Savroli and Dehvali, taluka Khalapur, district Raigad (near Khapoli), Maharashtra”.
According to the deed, the mortgage covered “all buildings, erections, godowns and every description erected or attached”.
In its website, Bhushan Steel talks about the key role played by the Khopoli plant. “The Khopoli plant, commissioned in 2004, has been playing a remarkable role not only in the growth of exports, but in the production of a much wider variety of value-added steel products such as cold rolled coil and sheet, corrugated sheet, galvanised coil and sheet, hardened and tempered coil, precision tubes, high-tensile steel strapping and colour-coated sheet. The production capacity of the Khopoli plant is 425,000 mt a year.”
Bankers have termed the plant “excellent”. To
A HEAVY BURDEN
- Rs 3,783 crore: The amount created by lenders as additional charge on the firm’s Khopoli plant in July
- Rs 36,853.42 crore: The total charge on the plant, spread across 113 acres near Mumbai
- Liabilities for which the fresh charges were made included a Rs 200-crore corporate loan by Syndicate Bank and Rs 200 crore towards non-convertible debentures placed with LIC