Impact Analysis of Bhushan Steel Resolution plan
Bhushan Steel was under Corporate Insolvency Resolution Process (CIRP) and on May 15, 2018, resolution plan was approved by the NCLT . On May 18, 2018, the company was acquired by Bamnipal Steel Limited (BMSL), a wholly owned subsidiary of Tata Steel Limited and later on renamed it to Tata Steel BMSL Ltd . Company recently issued its first Annual report post acquisition. We tried to dive into the impact of the resolution plan to the financial, other stakeholders and other aspects through this article. Structuring of the deal As a part of resolution plan, BMSL paid Rs. 35,100 crores to the financial creditors of Bhushan Steels to settle their claims. Amount was infused by way of issue of equity shares and inter-corporate deposits. Detail break-up is as follows: Table 1: Resolution Plan Break-Up (All Figs in ₹ Lacs) Treatment Issue of Shares to BMSL (Rs. 2 each) 15,888.58 Treated as Inter-Corporate Deposit 34,...