Over 95% of the creditors voted for the transaction while the rest including a foreign bank and an asset reconstruction company abstained from clearing the decks for the deal, two people familiar with the vote said.
Thursday was the last date for voting.
“JSW will now move ahead and open an escrow account in lead lender
(PNB) in which the amount will be transferred. The monies will then be distributed among financial creditors before the end of March,” said a person cited above.
JSW Steel was chosen as the winning bidder for the assets of BPSL in September 2019. The company had offered to pay Rs 19,350 crore to the financial creditors, with the lenders taking nearly a 60% haircut on the dues. Apart from this, JSW had offered to pay Rs 350 crore to operational creditors against their admitted claims of Rs 700 crore.
ED attached Odisha assets
However, it failed to conclude the deal after the Enforcement Directorate attached an estimated Rs 4,000 crore worth of Bhushan Power & Steel’s assets in Odisha under the provisions of the Prevention of Money Laundering Act. JSW Steel had sought immunity from these allegations.
SBI to recover over Rs 4,000 crore and had admitted claims of Rs 9825 crore against the company, PNB will recover around Rs 4,399 crore and Canara Bank to recover Rs 2,244 crore.
The matter is listed for hearing again on March 17th, 2021.
As per JSW Steel’s proposal, financial creditors are free to take the payment from an escrow account. However, in case the Supreme Court for any reason sets aside the plan or denies immunity to JSW against enforcement directorate (ED) cases against the previous promoters of BPSL, this amount will be refunded to JSW.
The recovery before the end of March will help banks gain from the large write-back from this account, which has been provided 100% by most lenders, pumping up their profits in a difficult fiscal impacted by a severe economic slowdown due to the Covid 19 pandemic.
BPSL was among the 12 large cases referred to bankruptcy courts by the RBI in 2017. The company owed lenders Rs 48,000 crore. JSW had bid for the 3.5 million tonne steel plant, trumping
‘s Rs 16,000 crore offer.
