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Sajjan Jindal-owned JSW Steel is close to finalizing a deal with bankers to take over Bhushan Steel’s debt of ₹30,000-33,000 crore and acquire majority stake in the company.

JSW Steel will get to own 55 per cent stake pledged by the company’s promoters to avail bank loans, said sources close to the development.

A senior public sector bank official said lenders would be more than happy to have on board a company in the same line of business.

“Bhushan Steel is a viable enterprise and is not easy to put up a company of its scale. We want our dues repaid. Any takeover proposal has to pass the muster with the joint lenders’ forum and be in sync with SEBI’s takeover norms,” he said.

A questionnaire sent to JSW Steel remained unanswered till the time of going to press.

However, the company in a statement to the BSE said it continues to evaluate various opportunities, both organic and inorganic, to achieve its long-term vision of becoming a 40-million-tonne steel company. In response to BusinessLine query, Nitin Johari, Director of Finance, Bhushan Steel, said he had no knowledge of the development. “Better check with banks,” he said.

Banks have been struggling with Bhushan Steel debt ever since the company defaulted on its interest payment in August 2014.

Further lenders led by State Bank of India and Punjab National Bank, were trying to restructure Bhushan Steel loan even while considering the option to carve out some parts of the business for sale.

The company has production capacity of five million tonne per annum at Dhenkanal (Odisha), Ghaziabad (Uttar Pradesh) and Khopoli (Maharshtra).

Having been declared a non-performing asset, Bhushan Steel pays 15 per cent of its turnover to banks and uses the remaining fund to keep the production running.

As of June, banks’ loan exposure to the iron and steel sector was ₹2.80 lakh crore.

Of this, about ₹1.24 lakh crore or roughly 45 per cent has been classified as non-performing assets.

Source: thehindubusinessline.com