A bench headed by Justice Bela M Trivedi and Justice Satish Chandra Sharma mandated the liquidation of Bhushan Steel and Power Ltd under the Insolvency and Bankruptcy Code.
The Supreme Court criticized the actions of all principal participants in the resolution process — the resolution professional, the Committee of Creditors (CoC), and the National Company Law Tribunal (NCLT) — for facilitating what it labeled a “flagrant violation” of the IBC.
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In 2021, JSW Steel acquired a 49% stake in Bhushan Power and Steel through the Insolvency & Bankruptcy Process, gaining a steel-making capacity of 2.75 MTPA in Odisha. By October 2021, JSW Steel increased its stake to 83%.
The Supreme Court outlined two reasons for invalidating JSW’s plan and initiating the liquidation of Bhushan Power and Steel.
The first reason involves finalizing the takeover using a combination of equity and optionally convertible debentures, while the Supreme Court insisted that this should solely be done through equity. The second reason is the failure to execute the resolution plan within the defined timeline.
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As per the latest quarter, Bhushan Power and Steel accounted for approximately 10% of JSW Steel’s total Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) and around 12.5% to 13% of its total capacity of about 37.5 MTPA.
JSW Steel Ltd shares closed at ₹1,024.85, reflecting an increase of ₹17.90, or 1.78%, on the BSE.
