JSW Steel has asked for 'security' from future litigations after lenders reported fraud by former promoters of Bhushan Power & Steel.
While ruling out that JSW Steel may reduce its bid amount, or back out from acquiring Bhushan Power & Steel, Chairman and Managing Director Sajjan Jindal said it is looking for 'security' for its acquisition.
Earlier this month, JSW Steel had moved NCLT for protection from litigations connected to BPSL's former promoters. This gave rise to speculations that the steelmaker could reduce its bid, or even pull out.
Jindal said the company is making enquiries, and that it is just seeking to keep 'sanctity' of its deal. JSW Steel had put in a bid of Rs 19,300 crore, to emerge victorious in the BPSL auction. Tata Steel and Liberty House were also in the fray.
Several banks, including Punjab National Bank and Allahabad Bank, had reported frauds of over Rs 5,000 crore involving former BPSL promoters, who are alleged to have misappropriated funds and manipulated books.
While the lenders have approved JSW Steel's resolution plan for BPSL, it is still to be cleared by NCLT.
Jindal, who was talking to media after the company's AGM in Mumbai, added there is no rethink in the company's inorganic strategy despite the slowdown. "Steel industry is cyclical. But we take investment decisions looking at the long term," he said.
JSW Steel is also in the running for Asian Colour Coated Ispat.
Jindal, however, agreed that turning around the acquired assets may now take a longer time than earlier envisaged. "Turnaround around plans for BPSL and Monnet Ispat may get affected. These will take about two years," said the Chairman and Managing Director.
JSW Steel had acquired Monnet Ispat through NCLT, and had initially talked about turning around the operations in a year. The company, along with Aion Investments, had acquired Monnet Ispat in September after the end of the insolvency proceedings. The combine was the only bidder for Monnet and paid Rs 2,875 crore. Monnet owed banks Rs 11,000 crore.
