A day after Tata Steel was declared the highest bider for acquiring stressed assets of Bhushan Steel, Larsen & Toubro Ltd has moved the National Company Law Tribunal seeking higher priority in getting its dues from the latter.
The judicial members of NCLT on Thursday have asked Vedanta, Tata Steel and resolution professional for Electrosteel Steels insolvency proceedings to submit a reply, following petition of Renaissance Steel of Dalmias on March 5.More news: Atwal 'shocked and devastated' by controversy over PM's India tour
Although Tata Steel did not disclose the financial details of the acquisition bid, two people close to the bidding process told Mint that the company has offered close to Rs 34,800 crore as upfront payment to banks and an additional Rs 1,200 crore to the operational creditors.
Bhushan Steel is one of the 12 large NPAs identified by RBI in June, 2017 for resolution process and owes Rs 44,400 crore to a consortium of creditors led by SBI.More news: Attorney General: Defending abortion bill could be tough
Bhushan Steel has an annual production capacity of 5.6 million tons and would significantly boost Tata Steel's annual output, now 13 million tons. It also supplies steel for producing consumer goods such as refrigerators and washing machines.
"Tata Steel can add the maximum value as well as draw the most benefit from Bhushan Steel", said an analyst who covers both the industry.More news: Sri Lanka declares emergency to curb communal violence
A controlling stake in Bhushan Steel gives Tata Steel an edge in the fast growing automotive steel market in India at a time of strong steel price upswing, a note from brokerage Edelweiss Securities said. In fact, PNB reportedly had an exposure of close to Rs 5,000 crore, much of which will now come back to coffers and help it to partly offset the damage allegedly wrought by Nirav Modi over the past seven years. The ongoing controversy might impact other bids of Tata Steel and Vedanta where they are frontrunner or participating.
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