Tata Steel on Friday said it has won a bid to acquire bankrupt Bhushan Steel for an undisclosed sum of money. Industry sources put the acquisition price at Rs 35,000 crore.
The all-cash deal, when completed, will help Tata Steel become India's biggest steel-maker. Bhushan Steel will add 5.6 million tonnes of capacity to Tata Steel's current 13 MTPA production capacity.
In a statement, Tata Steel said it "has been declared as the successful resolution applicant by the Committee of Creditors of Bhushan Steel (BSL) on March 22, 2018, subject to obtaining necessary regulatory approvals, including approval from the NCLT and the Competition Commission of India".
JSW Steel, as well as a group of employee in a tie-up with a private equity firm, had bid for Bhushan Steel in an auction conducted after the firm defaulted in payment of close to Rs 48,100 crore of loans to banks.
"Tata Steel has accepted the Letter of Intent for BSL under the Corporate Insolvency Resolution Process (CIRP) of the Insolvency and Bankruptcy Code 2016 (IBC)," the company said in the statement.
In a separate stock exchange filing, BSL said, "As per instructions of the Resolution Professional (RP), we wish to inform you that the Committee of Creditors of Bhushan Steel has approved the resolution plan submitted by Tata Steel, by e-voting process conducted for the meeting held on March 20, 2018".
"The Resolution Professional of BSL will now file the resolution plan to the National Company Law Tribunal (NCLT) for its requisite approval," it said.
Tata Steel plans to double capacity to 26 million tonnes in five years. It recently commissioned a greenfield steel plant at Kalinganagar, Odisha. Bhushan Steel will help Tata Steel overtake JSW Steel to become the country's top steel producer.