Rajeev Singhal is all set join Bhushan Steel as new Managing Director after it was acquired by Tata Steel through India’s new insolvency and bankruptcy process.
Rajeev Singhal will take over as the new managing director of the steelmaker, while Krishnava Dutt has been appointed independent director, according to information on Bhushan Steel’s website. The new board comprises of three non-executive directors – Anand Sen, Shuva Mandal and Dibyendu Dutta.
“All appointments are with effect from May 2018,” a company official said.
On May 18, Tata Steel — which had won the bid for Bhushan Steel in an insolvency process — completed the acquisition of controlling stake of 72.65 per cent in the debt-laden firm.
“Settlement of the amounts equivalent to Rs 35,200 crore towards financial creditors of BSL is being undertaken as per the terms of the resolution plan and corresponding transaction documents,” the Tata Steel had said in a statement.
With this acquisition, Bhushan Steel became one of the 12 large corporate accounts which were referred by Reserve Bank of India for NCLT (National Company Law Tribunal) Proceeding in June 2017. The company owes Rs 44, 478 crore to its lenders.
Why this acquisition is an achievement for BJP Government?
Successful acquisition of Bhushan Steel has surely added some points in BJP’s kitty. Union Finance Minister Piyush Goyal (who recently took the finance ministry’s charge from Arun Jaitley in wake of the latter’s ill health) described it as a “historic breakthrough” in resolving legacy issues of banks. The purchase is set to help the banks recover NPAs amounting to over Rs. 36,000 crore in the time to come.
Piyush Goyal said, “Liquidation value of Bhushan Steel was Rs. 14,541 crore but creditors received almost 4 times the amount (Rs. 36,400). This was possible due to the robust and transparent Insolvency & Bankruptcy Code brought by this Government.”
What is Insolvency and Bankruptcy Bill?
Insolvency and Bankruptcy Bill was passed by Lok Sabha in June 2017. The bill seeks to replace an ordinance which was promulgated in November 2016 to prevent unscrupulous persons from misusing or vitiating the provisions of the Insolvency and Bankruptcy Code. Loan defaulters can participate in bidding under the insolvency proceedings after paying due interest and making their bad loan accounts operational.
