Shares of beleaguered steel firm Bhushan Steel, currently undergoing bankruptcy proceedings, got a shot in the arm on Thursday when it became clear the country’s leading steel maker Tata Steel has emerged as the highest bidder.
In a regulatory filing to National Stock Exchange, Bhushan Steel said resolution plans were presented to a committee of creditors and the plan submitted by Tata Steel had been evaluated as the best, reports Moneycontrol.com.
There would be further discussions with Tata Steel on their resolution plan before it is considered for final approval by creditors, it added.
Tata Steel emerged as the highest bidder with a bid of 350 billion rupees (US$5.4 billion), with JSW Steel offering the second highest bid of 297 billion rupees ($4.6 billion).
Bhushan Steel, the largest manufacturer of auto-grade steel in India, ran into debt with various lenders and owes close to 440 billion rupees ($6.8 billion) all up. It was among 12 companies identified by the Reserve Bank of India for early bankruptcy proceedings.
Bhushan Steel has an annual production capacity of 5.6 million tons and would significantly boost Tata Steel’s annual output, currently 13 million tons. Bhushan’s clients include leading automotive companies such as General Motors, Hyundai Motors, Ford Motor, Mahindra & Mahindra and Eicher Tractors.