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HomeMarket NewsJSW Steel shares tank after Supreme Court holds Bhushan Power & Steel resolution plan as 'illegal'
The Supreme Court has cited two grounds for striking down JSW's plan and has directed the liquidation of Bhushan Power and Steel.
Shares of JSW Steel Ltd. fell over 6% on Friday, May 2, after the Supreme Court dealt the resolution plan of Bhushan Power & Steel Ltd., for which JSW Steel was declared the winning bidder, as "illegal."
Bhushan Power and Steel was taken over by JSW Steel in 2021 and has invested close to ₹20,000 crore to turn around this asset.
The Supreme Court has cited two grounds for striking down JSW's plan and has directed the liquidation of Bhushan Power and Steel.
The first is for completing the takeover with a mix of equity and optionally convertible debentures, while the Supreme Court had held that this should be done only via equity.
Second ground cited is failing to complete the resolution plan within the prescribed timeline.
Supreme Court lawyer HP Ranina said that the only way JSW Steel can salvage the situation is to file a review petition and say that this will be done only via equity and not issue convertible debentures.
As of the most recent quarter, Bhushan Power and Steel contributed to around 10% of JSW Steel's overall Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) and around 12.5% to 13% of its overall capacity of around 37.5 MTPA.
Shares of JSW Steel are trading 5.8% lower after the judgement at ₹971.
