Govt is finalising response to SC’s decision on JSW Steel-Bhushan deal, ET LegalWorld
The Indian government has discussed with banks a court order that scrapped JSW Steel’s plan to acquire Bhushan Power and Steel, and is finalising a response, the secretary of the Department of Financial Services (DFS) under India’s Finance Ministry said on Monday.
‘I have already reviewed (the order) with all the lenders. We have taken a position, we have studied the judgement, we have got our advocates’ view on the judgment,’ M Nagaraju of the DFS said.
‘Now we are taking a view in the government on how do we approach the judgment. We will finalise soon.’
JSW Steel is likely to take a hit of 10-15 per cent on production and around 10 per cent on earnings before interest, tax, depreciation and amortisation if subsidiary Bhushan Power & Steel heads to liquidation, as directed by the Supreme Court, analysts said.
Analysts were estimating JSW Steel to post a consolidated Ebitda of ₹42,000-45,000 crore in the fiscal year that started April 1. It could fall short by ₹4,000-4,500 crore in the absence of Bhushan.
JSW Steel acquired Bhushan Power & Steel out of bankruptcy in 2019 for ₹19,700 crore, making it the Sajjan Jindal-owned steelmaker’s largest acquisition till date.
The top Court on Friday rejected JSW Steel’s insolvency resolution plan for Bhushan Power & Steel, terming it illegal. The National Company Law Tribunal had approved the resolution plan 2019.
JSW Steel, the largest steelmaker in India, currently has a production capacity of 34.2 million tonnes, and Bhushan Power & Steel accounts for more than 13 per cent of this.
The shares of JSW Steel were trading at ₹965.10 a piece on the BSE, down 0.73 per cent as of 11:33 am on Monday.
