INSUBCONTINENT EXCLUSIVE:
Rs 1,200 crore will be paid to the creditors of Bhushan Steel over a period of 12 months
scurries to take credit for the deal, that is set to help the banks recover NPAs amounting to over Rs 36,000 crore in the time to come
Union Finance Minister Piyush Goyal said, "Liquidation value of Bhushan Steel was Rs 14,541 crore but creditors received almost 4 times the
This was possible due to the robust and transparent Insolvency Bankruptcy Code brought by this Government.A Tata Steel press release on
Friday stated that settlement of the amounts equivalent to Rs 35,200 crore towards financial creditors of Bhushan Steel is being undertaken
as per the terms of the resolution plan
Rs 1,200 crore will be paid to the operational creditors of Bhushan Steel over a period of 12 months as per their limited claims
Bhushan SteelFurther congratulating to Prime Minister Narendra Modi and Arun Jaitley for a "historic breakthrough in resolving legacy issues
of banks", Goyal said that lenders (banks) 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."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," said Goyal.Goyal
asserts, in his twitter handle, that the NPA resolution process is being done through a fair and transparent Insolvency Bankruptcy Code
(which is) helping boost both the banking sector the economy
14,688 CroreWith recovery of NPAs, said Goyal, banks will now be in a position to offer more and affordable credit to major sectors of the
economy especially the MSME sector
This will boost employment the economy even more, wrote Goyal.Not only Goyal, even Rajeev Kumar, secretary department of financial
services, called the day as "historic" since the banks recover Rs 32,500 crore from the sale of Bhushan Steel to Tatas under the Insolvency
Banks will gain from write back," he wrote on his unconfirmed twitter handle
He further added that 53 lenders, domestic and international, stand to recover Rs 35,200 crores which is 76% of the outstanding bad debt
Mr Kumar said that the whole process got completed in 270 days from admission in NCLT
Creditors to also get upside from 12% equity stake now in strong hands.The Tata Steel press release states that the investment from Tata
Steel's subsidiary Bamnipal Steel (BNPL) in Bhushan Steel has been done through a combination of equity of Rs 158.89 crore and inter
corporate loans of Rs 34,973.69 crore
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
The deal is being financed through a combination of external bridge loan of Rs 16,500 crore availed by BNPL and balance amount through
investment by Tata Steel in BNPL
