Debt-laden Bhushan Steel Ltd on Wednesday said its board has approved the demerger of its plants in Uttar Pradesh, Maharashtra and Odisha via slump sale.
The Bhushan Steel board on 12 February approved “demerging by way of slump sale to different subsidiaries through Business Transfer Agreement company’s plants situated at Sahibabad in Uttar Pradesh and Khopoli in Maharashtra,” the company informed NSE.
The board also approved, in principle, demerger of its 3.1 million tonnes capacity integrated steel plant in Odisha into two parts.
Creditors had asked Bhushan Steel to sell its integrated steel plant in Dhenkanal, Odisha, to raise cash and repay some loans, Mint reported in November 2014, quoting three bankers in the know of the development.
Bhushan Steel has a total capacity of 5.6 million tonnes across these three plant locations.
As of September 2015, the company had a standalone debt of Rs.40,842.83 crore. The company has been under financial stress, with losses reported for the past few quarters. For the December quarter, Bhushan Steel posted a net loss of Rs.697.15 crore.
On Wednesday, Bhushan Steel ended at Rs.36.05 on the BSE, up 5.87% from its previous close while India’s benchmark Sensex Index rose 0.92% to close at 23,381.87 points.