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TATASTLBSL - Tata Steel BSL News Story

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Last Trade - 25/09/20

Sector
Basic Materials
Size
Small Cap
Market Cap £237.3m
Enterprise Value £1.91bn
Revenue £1.76bn
Position in Universe 480th / 3012

UPDATE 1-India's Tata Steel emerges as top bidder for Bhushan Steel

Wed 7th March, 2018 2:45pm
* Tata Steel was competing with rival JSW Steel
    * Bhusan Steel has been forced to bankruptcy court
    * Company specialises in steel for car industry

 (Adds background, details from analysts)
    By Promit Mukherjee
    MUMBAI, March 7 (Reuters) - Tata Steel Ltd  TISC.NS  said on
Wednesday it had been selected as the highest bidder to buy a
controlling stake in debt-laden Bhushan Steel Ltd  BSSL.NS ,
ending weeks of speculation on which Indian group would clinch a
deal.
    Salt-to-software conglomerate Tata Group's steel business
and India's biggest domestic steelmaker JSW Steel Ltd  JSTL.NS 
were the two primary industry bidders for the acquisition of
Bhushan Steel. 
    At 559.89 billion rupees ($8.75 billion), Bhushan Steel
faces the highest claims among a dozen companies pushed to
bankruptcy court last year as part of a government drive to
clear a mountain of bad loans choking credit at Indian banks.
    "It (Tata Steel) has been identified as the highest
evaluated compliant resolution applicant to acquire controlling
stake of BSL (Bhushan Steel Ltd)," the company said in a stock
exchange notice on Wednesday evening.
    Based in the east of India, the company has an annual
steelmaking capacity of 5.6 million tonnes and is one of the
biggest producers of cold-rolled steel products used to make
cars. It also supplies steel for producing consumer goods such
as refrigerators and washing machines. 
    A controlling stake in Bhushan Steel gives Tata Steel an
edge in the fast growing automotive steel market in India at a
time of strong steel price upswing, a note from brokerage
Edelweiss Securities said.
    Tata's access to iron ore mines also puts it in a much
better position to turn around Bhushan Steel's unit.
    "Tata Steel can add the maximum value as well as draw the
most benefit from Bhushan Steel," said an analyst who covers
both the industry.
    Bhushan Steel had said last month that the resolution
professional managing its case received plans from Tata Steel,
JSW Living, a subsidiary of JSW Steel, and employees of Bhushan
Steel.  urn:newsml:reuters.com:*:nFWN1Q802B
    India, which did not have a formal bankruptcy process until
mid-2016, has seen a surge in bankruptcy cases since last year,
with over 500 companies currently facing bankruptcy court
proceedings.
    The surge in cases comes after the government changed the
law giving greater powers to the central bank, which has so far
ordered creditor banks to push nearly 40 companies with loan
defaults of nearly 4 trillion rupees ($62.5 billion) into
bankruptcy proceedings.
    Essar Steel Ltd, another company with a heap of sour loans
owed to banks, has seen heightened interest and aggressive
bidding from world's biggest steelmaker ArcelorMittal  MT.AS 
and a consortium led by Russian bank VTB, according to Indian
media reports.

 (Reporting by Promit Mukherjee in Mumbai
Additional reporting by Tanvi Mehta in Bengaluru
Editing by Subhranshu Sahu and Keith Weir)
 ((promit.mukherjee@thomsonreuters.com; +91-22-6180-7516;
Reuters Messaging:
promit.mukherjee.thomsonreuters.com@reuters.net))
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