Tata Steel BSE -1.65 percent surpassed JSW Steel with an all-cash bid of 5 million of Bhushan Steel BSE -3.44 percent which is one of the huge non-performing assets in the banking system of India. An upfront cash payment of Rs. 35, 200 Crore along with 12.2 percent equity to the lenders has been offered to the lenders. There was a third bid as well which came from the employees of Bhushan Steel who said that they were willing to pay Rs. 50 Crore in cash and the other Rs. 28,600 Crore over a period of 13 years with equity of 98 percent to its lenders.
The promoters of Bhushan Steel owe Rs. 56,000 to the financial creditors. In a meeting of the committee of creditors of Bhushan Steel, these bids were opened in front of them at a hotel in New Delhi. The offer made by the Tata Group was a relief to the banks which should allow the banks to write some of their provisions back because they provided for bigger losses on the debt in the past. These banking sources were also heard telling that the Tata Steel was the frontrunner of Bhushan Steel with a bid that converted into 27 percent haircut for the lenders. Tata is also willing to pay Rs. 1200 Crore to the operational creditors. This transaction of Tata Steel was advised by Arpwood Capital.
The resolution professional will enter into the last and final round of negotiations with all the top bidders in order to clear out any clarifications which might arise on the last minute before the final decision is reverted to the committee of creditors. As yet, no meetings for the same have been fixed. Also, the bankers do not wish to have any obstacles in the process given the standing of these two leading contenders.