A bench comprising Justice Bela M Trivedi and Justice Satish Chandra Sharma ordered the liquidation of Bhushan Steel and Power Ltd under the Insolvency and Bankruptcy Code.
The top court criticised the conduct of all key stakeholders in the resolution process — the resolution professional, the Committee of Creditors (CoC), and the National Company Law Tribunal (NCLT) — for enabling what it termed a “flagrant violation” of the IBC.
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JSW Steel had acquired a 49% stake in Bhushan Power and Steel through the Insolvency & Bankruptcy Process in 2021, getting a 2.75 MTPA steel-making capacity in Odisha. By October 2021, JSW Steel had increased its stake to 83%.
The Supreme Court has cited two grounds for striking down JSW’s plan and has directed the liquidation of Bhushan Power and Steel.
The first is for completing the takeover with a mix of equity and optionally convertible debentures, while the Supreme Court had held that this should be done only via equity. The second ground cited is failing to complete the resolution plan within the prescribed timeline.
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As of the most recent quarter, Bhushan Power and Steel contributed to around 10% of JSW Steel’s overall Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) and around 12.5% to 13% of its overall capacity of around 37.5 MTPA.
Shares of JSW Steel Ltd ended at ₹1,024.85, up by ₹17.90, or 1.78%, on the BSE.
