More than two-thirds of lenders to bankrupt Bhushan Power and Steel on Tuesday *voted in favour of a revised offer* by JSW Steel, turning on the heat in a contest for an asset that is being pursued by Tata Steel and UK’s Liberty House, according to people directly briefed on the matter. Nearly 90% of lenders voted in favour of Sajjan Jindal-promoted JSW’s bid, which has offered upfront payment of Rs 19,300 crore to banks in lieu of the loans they have to recover from debt-laden Bhushan Power and Steel (BPSL). JSW has *emerged a dark horse* in the race for BPSL after it initially showed signs of bowing out of the contest for the bankrupt company with a weak offer of Rs 11,500 crore, which was trumped by Tata Steel with its bid of Rs 17,000 crore for the company. Tata’s offer was bettered by UK’s Liberty House, which submitted a bid of Rs 18,500 crore for the steel maker on February 20, well past the deadline for submission of bids, forcing Tata to go to court to block the UK company from participating in the bankruptcy auction. JSW surprised the other two contestants by placing a revised offer on August 13, citing a substantial improvement in BPSL’s operations and financial performance as the reason for raising its offer significantly. JSW Steel and Tata Steel declined comment. BPSL was dragged to bankruptcy court in June last year after its promoter, Sanjay Singhal, defaulted on Rs 47,000 crore of dues owed to banks. JSW’s bid accounts for the value maximisation that has resulted from the operational turnaround of the company over the past 15 months since it went into insolvency proceedings, a banker told.
The stressed steel maker, which has 3.1 million tonnes per annum of production capacity, is operating at 90% capacity utilisation at its plants and has been growing revenues each quarter over the past five quarters, according to sources. The *company has also cleared nearly Rs 400 crore of dues* to operational creditors and has paid off employee and statutory dues. The resolution professional of the company, Mahender Khandelwal, will take the results of the voting to the National Company Law Appellate Tribunal (NCLAT), which is hearing an appeal by Tata Steel that is still fighting to assert the validity of its bid, which was the highest offer submitted at the time of the first official deadline of February 8 for submission of bids. Tata had initially sought a stay on the insolvency resolution process of BPSL till the time its appeal was being heard in court. The request was declined by the NCLAT in August, which allowed all the three bidders—Tata, JSW and Liberty House—to submit revised offers if they wanted, till Tata’s case was being decided. Only JSW submitted a revised financial offer post the order. JSW Steel, which also purchased bankrupt steel maker Monnet Ispat in a consortium with PE firm Aion Capital, is competing neck and neck with Tata Steel with both companies having comparable steel production capacities of around 19 million tonnes per annum each. Tata has caught up with JSW after it acquired Bhushan Steel, a company formerly owned by Sanjay Singhal said.