NCLT approves Tata Steel’s resolution plan for Bhushan Steel acquisition

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Mumbai, May 15, 2018: Tata Steel Limited (Tata Steel’) hereby announces that National Company Law Tribunal (Principal Bench, New Delhi) (`NCLT’), vide its order dated May 15, 2018, has approved the resolution plan submitted by Tata Steel for acquiring the controlling stake of Bhushan Steel Limited (`BSL’) under the Corporate Insolvency Resolution Process (`CIRP’) of the Insolvency and Bankruptcy Code 2016 (IBC).

As per the terms of approved Resolution Plan, Bamnipal Steel Limited (`BNPL’), a wholly-owned subsidiary of Tata Steel, will initially subscribe to 72.65% equity share capital of BSL at face value i.e. at Rs 2 per share, for an aggregate amount of Rs.158.89 crore.

The financial creditors shall receive a total consideration of INR 35,200 crores for the settlement of the existing financial debt of BSL. The above settlement includes consideration for novation of a portion of the debt to BNPL. Funds required for such settlement shall be funded by Tata Steel / BNPL through a combination of: (a) equity subscription; and (b) inter-corporate loans, of which upto Rs 9,000 crore loans has an option of conversion into equity shares of BSL. Additional funds shall also be infused by BNPL to repay admitted CIRP cost and admitted employee dues.

As per the approved Resolution Plan, the financial creditors shall be allotted equity shares by virtue of conversion of loan amount of INR 14.5 crores at a face value of INR 2 each. The Resolution Plan also requires financial creditors to invoke pledge on existing equity shares of BSL.

The outstanding redeemable preference shares of the Company would be purchased by BNPL, and to the extent not transferred to BNPL, would be redeemed by the Company on the Closing Date, in terms of the Resolution Plan, in either case for an aggregate consideration of INR 100.

As per the approved Resolution Plan, BNPL shall be classified as the ‘promoter’ of BSL, and the existing promoters / promoter group shall be de-classified as ‘promoters / promoter group’ of BSL for the purposes of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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