Last week, Finance Minister Piyush Goyal had tweeted that the acquisition was a "historic breakthrough in resolving legacy issues of banks".
Mumbai: Tata Steel Ltd.is preparing a Rs11,500 crore ($1.7 billion) loan to help fund its purchase of assets from Bhushan Steel Ltd., people familiar with the matter said. According to a PTI report, Bank of India (BoI) would be able to realise around Rs 1993 crore from the Tata-Bhushan Steel deal.
Retail, agri and MSME advances constituted more than 50 per cent of the total lending of the bank, Mohapatra said.
"Lenders recovered nearly entire principal loan of Bhushan Steel through Rs 36,400 crore transparent bid by Tata Steel and also got 12 per cent stake in the company".
Bamnipal Steel Ltd (BNPL), a wholly-owned subsidiary of Tata Steel, has successfully completed the acquisition of controlling stake of 72.65 per cent in Bhushan Steel Ltd (BSL) for around Rs 36,400 crore, Tata Steel said in a statement on Friday. The bridge loan availed by BNPL is expected to be replaced by debt raised by Bhushan Steel over time.
He added that the Narendra Modi government was "systematically cleaning the financial and economic mess left behind by the Congress". "This will boost employment & the economy even more". "This was possible due to the robust and transparent Insolvency & Bankruptcy Code brought by this Government".
He said the NPA resolution process was being done through a fair and transparent Insolvency and Bankruptcy Code which has been recognized by global credit rating agencies as well. "Settlement of the amounts equivalent to Rs35,200 crore towards financial creditors of BSL is being undertaken as per the terms of the resolution plan and corresponding transaction documents", the company said.
Bhushan Steel, India's largest manufacturer of auto-grade steel, based in New Delhi, is one of the first major defaulters to be targeted under India's new insolvency and bankruptcy code.
Tata Steel will absorb all the employees of the company as per the resolution plan submitted and approved by the committee of creditors.
Lenders to Bhushan Steel also received 7.25 crore equity shares worth Rs 2 each, after conversion of Rs 14.5 crore worth loans in the company, the exchange notification said. Additionally, Rs. 100 crore has been paid by BNPL to the financial creditors of Bhushan Steel as consideration for novation of remaining financial debt of Bhushan Steel.