JSW weighing options to fund buy of Bhushan, Essar

Sajjan Jindal-led JSW Steel is exploring various financing models, including a ‘joint control mechanism’, to fund the acquisition of the stressed assets of Bhushan Power and Steel Ltd and Essar Steel, a source said.

This assumes significance as JSW Steel’s Rs 19,700 crore offer for debt-laden Bhushan Power and Steel (BPSL) has been backed by around 90% of lenders. “JSW Steel is exploring differentiated financing options, including joint control model, to fund its acquisition of stressed assets of Bhushan Power and Steel and Essar Steel,” according to a banking source.

Under the joint control model, a special purpose vehicle (SPV) will be set up and the acquired stressed assets will rest with the SPV.

Joint control model will insulate debt impact of yet to be acquired stressed assets of these two firms on JSW Steel financials, the source said.

If acquired, JSW Steel is exploring to merge the stressed assets of the both companies into its books post turnaround of the stressed assets, the source said. When contacted, JSW Steel spokesperson declined to comment.

Bhushan Steel and Power is among the 12 non-performing accounts referred by the RBI for NCLT proceedings and owes about Rs 45,000 crore to its lenders. According to reports, JSW Steel had submitted a resolution plan of Rs 19,700-crore to the Committee of Creditors of Bhushan Steel and Power.

JSW Steel had teamed up with NuMetal Mauritius to place a Rs 37,000 crore offer for Essar Steel in the second round of bidding.

It had earlier said it was seeking a legal opinion if it can bid solo for stressed assets of Essar Steel if fresh bids were allowed.