JSW and Tata Steel bid for Bhushan Power on the final day

JSW Steel and Tata Steel bid for Bhushan Power & Steel on the final day for submission of bids. JSW Steel has gained an edge with an offer of Rs 13,000 crore over Tata Steel that has made an offer of Rs 11,500 crore to bid for the debt-laden company. The bids will be placed before a legal team, after which SBI Caps will evaluate the financial plans and place it before the committee of creditors. The process could be over by February 16, according to sources. Around 13 companies had submitted expressions of interest. Some did not qualify and only five were provided access to the virtual data room.

The liquidation value for Bhushan Power was estimated to be around Rs 9,000 crore, while the fair value was estimated to be vastly different at Rs 25,000 crore. Bhushan Power is one of the few companies where lenders had pressed for a fair value much before the insolvency regulator made it mandatory. The committee of creditors is likely to be guided by an average of the liquidation value and the fair value.

The company’s debt in FY16 stood at Rs 37,200 crore, net sales were at Rs 7,700 crore and losses were at Rs 2,436 crore. The dues, however, have ballooned to Rs 47,000 crore now.