The Competition Commission of India (CCI) has granted regulatory clearance for a significant merger in the steel sector, approving the consolidation of Bhushan Power And Steel Limited with JSW Sambalpur Steel Limited, JFE Steel Corporation, and JSW Kalinga Steel Limited.

Regulatory Approval Details

The merger approval involves multiple entities, with Bhushan Power And Steel Limited being consolidated with three other companies. The transaction includes JSW Sambalpur Steel Limited and JSW Kalinga Steel Limited, both part of the JSW Group's steel operations, along with JFE Steel Corporation, a major Japanese steel manufacturer.

Strategic Consolidation

This regulatory clearance represents a notable development in India's steel sector consolidation efforts. The merger brings together domestic steel operations under the JSW umbrella with international partnership through JFE Steel Corporation's involvement.

Industry Impact

The CCI's approval enables the formal consolidation of these steel sector entities, facilitating operational integration among the involved companies. The merger combines domestic steel manufacturing capabilities with international expertise through the participation of JFE Steel Corporation.

This regulatory clearance removes a key hurdle for the proposed consolidation, allowing the companies to proceed with their integration plans in the Indian steel market.

In a significant development in the Bhushan Power and Steel (BPSL) insolvency case, banks have altered their stance, now demanding that the company's EBITDA should be directed to creditors during the ongoing insolvency process, rather than remaining with JSW Steel. This shift in position highlights the complex nature of the case and the substantial financial interests at stake.

Key Points of Contention

• EBITDA Flow: Banks argue that the EBITDA generated during the insolvency process, amounting to thousands of crores, should be allocated to creditors.
• Interest Payments: Lenders are also seeking interest payments to compensate for delays in implementing the resolution plan.
• Potential Gains: Banks claim that under the current process, JSW Steel stands to gain ₹19,000.00 crore plus BPSL's EBITDA.

Supreme Court's Stance

The Supreme Court has shown a nuanced approach to the case:

• Allowed review petitions from both JSW Steel and lenders on July 31.
• Emphasized that liquidation should be considered a last resort, given the company's current status:
  • BPSL now employs 25,000 workers
  • Has seen significant capital infusion
  • Experienced notable increases in production

Background of the Case

• JSW Steel was declared the successful resolution applicant in 2019.
• The resolution plan was approved by the National Company Law Tribunal (NCLT) and upheld by the National Company Law Appellate Tribunal (NCLAT).
• In a recent development, the Enforcement Directorate withdrew its challenge and returned assets worth ₹4,025.00 crore to JSW.

Implications and Next Steps

This change in the banks' position adds a new layer of complexity to an already intricate insolvency process. The outcome of this case could have significant implications for:

1. The distribution of funds generated during insolvency proceedings
2. The rights and responsibilities of successful resolution applicants
3. The balance between creditor interests and the operational continuity of distressed companies

As the case continues to unfold, all eyes will be on the Supreme Court and how it navigates these competing interests while ensuring the best possible outcome for all stakeholders involved.