Tata Steel on Friday announced the completion of its acqusition of controlling stake of 72. 65 per cent in Bhushan Steel Ltd.
Tata Steel on Friday announced the completion of its acqusition of controlling stake of 72. 65 per cent in Bhushan Steel Ltd through its subsidiary Bamnipal Steel Ltd for around Rs 36,400 crore.
Bhushan Steel is the first to emerge successfully from insolvency and bankruptcy process among the initial dozen big defaulters under a law enacted for quick recovery and settlement of assets.
Banks, which though have taken a more than 37% haircut on their outstanding loans of Rs 56,079 crore to Bhushan Steel, can now classify the assets as standard, reducing their bad loan burden. They are likely to reverse the provisions they had made against the account, significantly boosting their first-quarter results. State Bank of India had the highest exposure of Rs 12,872 crore to Bhushan Steel, followed by Punjab National Bank at Rs 4,904 crore and ICICI Bank at Rs 2,449 crore.
Meanwhile, Finance Minister Piyush Goyal on Friday said the purchase of debt-ridden Bhushan Steel by a Tata Group company under the IBC proceedings as a "historic breakthrough" in resolving legacy issues of banks.
Goyal in a tweet said that it is a "historic breakthrough in resolving legacy issues of Banks".
"Lenders recovered almost entire principal loan of Bhushan Steel through Rs 36,400 crore transparent bid by Tata Steel and also got 12% stake in the company," he tweeted.
Goyal, who is holding the charge of Finance Ministry temporarily, further said that it is for the first time such a large loan resolution has been achieved through upfront payment received by banks through sale of a company.
"This is a record step towards resolving the legacy of unprecedented amount of bad bank loans inherited by this Government," he added. Goyal further said the NPA resolution process is being done through a fair and transparent IBC.
The government under the leadership of PM Narendra Modi has been systematically cleaning the financial & economic mess left behind by the Congress, he tweeted. "Cleaning up banks & resolving NPAs is part of Congress Mukt Bharat #NPAturnaround," he said in a tweet.
