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December 2018
8:01 AM IST
News Headlines
Trump's son-in-law Jared Kushner possible next chief of staff: US media        Sri Lanka PM Mahinda Rajapaksa to resign, says his son after court setback        Rahul Gandhi After Rafale Verdict: "Will Prove PM Helped Anil Ambani"        Author Amitav Ghosh Honoured With 54th Jnanpith Award        Supreme Court sees no wrongdoing in Rafale deal, rules out probe        India bowled a little bit short, Australia pacers could benefit: Border        ISL: FC Goa thrash NorthEast United 5-1        BWF World Tour Finals: PV Sindhu, Sameer Verma Register Easy Wins To Enter Semifinals        Diving legend says HIV-contracted friend inspired him to Olympic gold        India beat Pakistan to reach final of Emerging Teams Asia Cup        Boosting exports key to make India $5-tn economy by 2025: Kant        Prabhu, US Commerce Secretary to discuss trade issues on Feb 14        Ceasefire for key Yemen port agreed at peace talks: UN        Britain's May sees no 'immediate breakthrough' at EU        Poll results prove Ram Temple or communal polarisation doesn't cut ice with people: Sinha        Ashok Gehlot appeals to Cong workers in Raj to maintain peace        Rahul tweets pic with Kamal Nath, Scindia as race for CM moves to Bhopal        Aussies will fight back, but India has upper hand: Ghavri        World Tour Finals: Tough road ahead for Sindhu; Sameer too eyes knockout berth        Govt should consider 100% FDI in multi-brand retail trade: CII report        
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Business News
Tata Steel emerges as the highest bidder for Bhushan Steel with a surprise bid of Rs 35,000 crore
 
(Mumbai, Feb 19, 2018):Tata Steel has just pulled off its largest acquisition to date. Pipping JSW Steel - contrary to all speculation - it has reportedly emerged as the highest bidder for Bhushan Steel. The latter, to remind you, was on RBI's first list of 12 companies to be referred to the National Company Tribunal Law (NCLT) and according to the latest Economic Survey, claims admitted under the insolvency proceedings stand at a whopping Rs 55,989 crore, making it the biggest bankruptcy, so far, to go under the hammer. What a coup pulled off by N. Chandrasekaran, the first non-Parsi chairman of the Tata Group in its 150-year-old history, as he begins the countdown to his first anniversary in office.

According to MoneyControl, Tata Steel's surprise bid of Rs 35,000 crore was Rs 5,300 crore more than rival JSW Steel's offer. The aggressive bidding makes sense since Bhushan Steel's annual capacity is 5.6 million tonne - according to its website. It is the third largest secondary steel producer in the country and its acquisition will help Tata Steel tighten its grip on the eastern region. According to advisory firm Bonaz Capital, this acquisition would help it to increase domestic steel capacity by around 43 per cent to 18.6 million tonnes per annum. "We expect the company to report revenue CAGR of 5.3 per cent over FY17-20E [expected] aided by 6.1 per cent volume growth in domestic steel production...EBITDA margins are also likely to expand by [around] 573 bps owing to better utilization for Tata Steel India," it added.

But given that the crippled Bhushan Steel Ltd reported widening of its net loss to Rs 1,607 crore for the quarter ended December 2017, a jump of 116 per cent year-on-year, not everyone is excited by the prospects. Shares of Tata Steel are down 7 per cent since morning. But the share price of Bhushan Steel has jumped up a whopping 20 per cent, the most in three months.

Incidentally, Tata Steel is also the leading bidder for Bhushan Power and Steel. According to The Economic Times, lenders to the company decided that they would only consider Tata Steel's offer of Rs 24,500 crore - which includes an upfront payment of Rs 17,000 crore to lenders, a cash infusion of Rs 7,000 crore to meet the company's working capital requirements and a payout to operational creditors-for further negotiations on Wednesday, setting aside JSW Steel's offer that is lower by Rs 11,500 crore. Sources also told the daily that if Tata Steel does manage to pull off both acquisitions, it might gain half the market share for flat-steel products in the country.


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INTERNATIONAL NEWS
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