NCLT approves Tata Steels resolution plan to acquire Bhushan Steel

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Mumbai : Tata Steel has said  that the  National Company Law Tribunal  has approved the resolution plan submitted by it for acquiring the controlling stake of Odisha based Bhushan Steel Limited (`BSL’) under the Corporate Insolvency Resolution Process (`CIRP’) of the Insolvency and Bankruptcy Code 2016 (IBC).

As per the terms of approved Resolution Plan, Bamnipal Steel Limited (`BNPL’), a wholly-owned subsidiary of Tata Steel, will initially subscribe to 72.65% equity share capital of BSL at face value i.e. at Rs 2 per share, for an aggregate amount of Rs.158.89 crore.

The financial creditors shall receive a total consideration of INR 35,200 crores for the settlement of the existing financial debt of BSL. The above settlement includes consideration for novation of a portion of the debt to BNPL. Funds required for such settlement shall be funded by Tata Steel / BNPL through a combination of: (a) equity subscription; and (b) inter-corporate loans, of which upto Rs 9,000 crore loans has an option of conversion into equity shares of BSL. Additional funds shall also be infused by BNPL to repay admitted CIRP cost and admitted employee dues.

As per the approved Resolution Plan, the financial creditors shall be allotted equity shares by virtue of conversion of loan amount of INR 14.5 crores at a face value of INR 2 each. The Resolution Plan also requires financial creditors to invoke pledge on existing equity shares of BSL.

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