Tata steel, which has emerged as the highest bidder for Bhushan Steel, will pay Rs 35,200 crore in cash to the debt laden firm's creditors and convert over Rs 27,000 crore worth of their loans into equity, the NCLT was informed today.
As on February 1, 2018 Bhushan Steel had a total debt of Rs 57,160 crore, senior advocate Ravi Kadam informed the Principal bench of the National Company Law Tribunal (NCLT) here.
"Tata Steel is the highest bidder (H1) offering an upfront payment of Rs 35,200 crore. Remaining debt would be converted into equity," he said.
Kadam further added: "Financial creditors would get 12.27 per cent of equity of the corporate debtor (Bhushan Steel) subject to SEBI approval."
Of its total debt, Bhushan Steel has a financial debt of Rs 56,051 crore and operational debt of Rs 1,050 crore, he added.
He further informed that Bhushan Steel has a liquidation value of Rs 14,541 crore.
Tata Steel has also offered Rs 1,200 crore to its operational creditors depending on the criticality to run the company.
Moreover, the company has offered to absorb all its serving employees.
During the proceedings, senior advocate Rajiv Nayyar, representing Tata Steel, said that Bhushan Steel will function as a going concern and it would infuse fresh funds into the company.
Senior advocate Tushar Mehta, appearing for the Committee of Creditor (CoC), said that bids of Tata Steel were judged on the basis of viability and feasibility on the commercial basis.
"99.8 per cent of the creditors had voted in the favour of Tata Steel. Only Indusind Bank did not participated but now they have also agreed," he said, adding that now "100 per cent creditors are agreed".
He added: "JSW steel has not come here in appeal. They have accepted our judgement over the resolution plan."
Over the allegations from the employees union of Bhushan steel that Tata Steel was ineligible for bid under section 29 of the IBC Code, Mehta said that the matter raised by them is of one of its foreign-based subsidiary Tata Steel UK.
"Tata Steel UK was fined but there was no imprisoned. It was asked to pay fine and the conviction was not under Indian law," he said.
However, senior advocate AS Chandhiok appearing for the employees of Bhushan Steel submitted that Tata Steel was ineligible under the IBC Code.
He would continue his arguments tomorrow before the NCLT.
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