JSW Steel's Acquisition of Bhushan Power Declared to be Illegal

JSW Steel ’s Rs. 19,700 crore resolutions for Bhushan Power and Steel Ltd (BPSL) have been rejected by the Supreme Court, claiming the resolution to be illegal. The court declared, “The resolution Plan of JSW was illegal and should not have been accepted by CoC.” The report suggests that the Supreme Court has given the verdict for the liquidation of Bhushan Power and Steel.

Bhushan Steel's 46 percent stake was acquired by JSW Steel in the year 2021. This was followed by the payment offer of Rs. 19350 crore to the creditors of Bhushan Steel. Additionally, JSW Steel has made an offer of up to Rs. 350 crore to the operational creditors against their claim of Rs. 733 crore. JSW progressed with its acquisition of stake, and by October 2021, Bhushan Steel’s 86 percent was gained by JSW.

The offered resolution was approved by the National Company Law Tribunal. But now this resolution has been considered illegal, the share price of JSW Steel is now trading at a low rate of 7 percent. The trajectory of this share has been 8 percent down from last month. The drop in the share price is considered the result of the Supreme Court’s decision on the case. Many are speculating that this may affect the future decisions of IBC.