M&A Magazine

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,...

MBL Infrastructure Ltd ( MBL Infra ) is engaged in the execution of civil engineering projects. The Company provides integrated engineering, procurement and construction (EPC) services for civil construction and infrastructure sector projects. Equity shares of company is listed on BSE & NSE and current market cap of the company is Rs. 58.24 crores. Insolvency Resolution Process & Resolution plan: Last year on 30 th March 2017 NCLT accepted an application filed by RBL bank for initiation of Corporate Insolvency Resolution Process (CIRP) against MBL Infra. During CIRP, a  resolution plan submitted by MBL promoter A.K Lakhotia is accepted by Committee of Creditors (CoC) and approved by NCLT by its order dated 18/04/2018. Table 1: MBL Infra - Admitted claim (Rs in crores) Particulars Admitted claims % of total claim Financial Creditors 1,428.21 94.78% Operational Creditors 78.66 5.22% Total 1,506.87 100% Liquidation Value 269.9   ...

Insolvency Proceedings Scenario: In order to tide over the mounting non-performing assets of banks, especially in the power and steel sector, the government legislated Insolvency and Bankruptcy Code (IBC). After one and a half year, lender’s filing cases against defaulting corporate debtor started picking up the pace, but only a few are reaching its desired conclusion and yielding in resolution plan. As per information available (June 2018), 33 cases have successfully resolved the matter by way of resolution plan till date. Amongst them, the bigger names are Bhushan Steel and Electro Steel steels Ltd which are part of 12 companies which were initially recommended by RBI for insolvency proceedings . In these two companies, financial creditors have taken a haircut of 36.51% and 59.62% respectively. Table 1: Top 10 Cases Resolved under the IBC (All figs in INR Crores - As of June 2018) Sl. No. Name of Corporate Debtor Total Admitted Claims Admitted Claims of FCs # Liquidati...