With things spinning out of control at the debt-laden Bhushan Steel, lenders have kicked off the process of finding a new buyer for the troubled steel company, three independent sources with direct knowledge said. Sources share that SBI Caps is the advisor to the deal and has initiated talks with Tata Steel, JSW SteelBSE 0.31 % for the sale of Bhushan Steel. ArcelorMittal backed Uttam GalvaBSE -0.21 % is also said to be in the fray.
Bhushan Steel's stock shot up 10 per cent in trades when ET Now broke the story during market hours on Tuesday.
"If there is enough interest, lenders would like to conduct a bid process" a source pointed out. Bhushan SteelBSE 3.53 % has a debt pile of over Rs 40,000 crores and after the promoter Neeraj Singhal was jailed in the Syndicate Bank cash-for-loan scam, the lenders got jittery. Neeraj Singhal, Vice Chairman of Bhushan Steel is out on bail now.
Bushan Steel, which is essentially a secondary steel producer, recently completed the backward integration project with hot rolled steel facility in Odisha. Bhushan Steel's assets could make strategic sense for Tata Steel, JSW Steel as well as Uttam Galva.
Sources also indicate that there could be a tug-of-war between the promoter and the lenders since the promoter may not want to sell the company. "Promoters own over 74 per cent stake in the company but a large part of it could be pledged with the lenders," a source said.
When contacted, JSW Steel did not respond to an ET Now query. Uttam Galva's spokesperson said, "There is no such plan as of now."
"The news is completely false and baseless. Bhushan Steel is a standard account. Hence, the question of lenders looking at selling it does not arise in this situation," Bhushan Steel told ET Now.
Source:ET
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