The Supreme Court has overturned its own judgment and upheld JSW Steel 's ₹19,700-crore resolution plan for Bhushan Power and Steel Ltd (BPSL). This decision marks a significant legal victory for JSW Steel, reinforcing its position in the steel industry.

Key Highlights

• The Supreme Court rejected the committee of creditors' plea seeking an additional ₹6,100 crore.
• The court stated that such claims have no basis under the Insolvency and Bankruptcy Code.
• BPSL was part of the Reserve Bank of India's original 'dirty dozen' referred for insolvency.
• The Supreme Court had initially scrapped JSW's plan citing delays and procedural violations.
• The court reversed its decision after review petitions.

Acquisition Details

JSW Steel acquired a 49% stake in BPSL through the insolvency process in 2021. The company later increased its stake to 83% by October 2021, gaining 2.75 MTPA steel-making capacity in Odisha.

Court's Observations

The Supreme Court noted that JSW Steel had invested significantly in BPSL and turned it into a profitable entity. This observation likely played a crucial role in the court's decision to uphold the resolution plan.

Market Response

Following the announcement, JSW Steel shares gained 1.50%, trading 1.10% higher at ₹1,160.50.

Implications

This ruling brings clarity to the acquisition process and sets a precedent for similar cases in the future. It underscores the finality of resolution plans approved under India's insolvency and bankruptcy framework, providing greater certainty for investors in distressed assets.

Conclusion

As the legal battle concludes, the focus now shifts to how JSW Steel will leverage this acquisition to strengthen its position in the competitive steel market. The company now has a clear path to fully integrate BPSL's assets and operations into its existing portfolio, potentially leading to increased production capacity and market share.

JSW Steel , a leading Indian conglomerate, has announced plans to raise ₹7,000 crore through non-convertible debentures (NCDs) to finance its acquisition of AkzoNobel India. This strategic move marks a significant step in JSW's expansion in the Indian market.

NCD Issuance Details

The bonds will have a unique structure with the following key features:

• Tenor: 4 years and 7 months
• Type: Zero-coupon structure
• Effective IRR: 8.50% for investors
• Issuing Entity: JTPM Metal Traders (JSW's investment arm)
• Issue Date: September 29
• Ratings: AA by Care Ratings

Allocation Structure

The NCD issuance is structured as follows:

Acquisition Details

The NCDs are being issued to fund JSW Group's acquisition of AkzoNobel India. Key points of the deal include:

• Maximum consideration for stake purchase: ₹9,400.00 crore
• Total deal value (including open offer): Approximately ₹12,915.00 crore
• Target stake: Up to 75% in AkzoNobel India
• Share Purchase Agreement: Signed on June 27

Financial Backing

The bonds come with strong financial backing, supported by corporate guarantees from the JSW Group. This level of support, combined with the AA rating from Care Ratings, is likely to instill confidence in potential investors.

Strategic Implications

This acquisition represents a significant move for JSW Group, potentially expanding its presence in the paints and coatings sector. AkzoNobel India, a subsidiary of the global paints and coatings company, has a strong presence in the Indian market, making it an attractive target for JSW's diversification strategy.

The successful raising of funds through this NCD issuance will be crucial for JSW Group to complete the acquisition and potentially reshape the competitive landscape in India's paints and coatings industry.

Investors and market watchers will be keenly observing the NCD issuance and the subsequent acquisition process, as it could have significant implications for both JSW Group and the broader industry sector.