Tata Steel is gearing up to acquire Bhushan Power & Steel, going through insolvency proceedings, if it gets the requisite approvals.
As far as the financing is concerned, Tata Steel would take a short-term loan, the balance would be a mix of cash accruals and there could be possibly some leveraging at the holding company level.
“We will not be in a position to comment on Bhushan Power & Steel as the matter is under the IBC (Insolvency & Bankruptcy Code) process,” a Tata Steel spokesperson said.
Tata Steel recently got a rating done by ICRA for a Rs 90 billion commercial paper programme. Will it be used for Bhushan Power? The spokesperson replied the commercial paper rating was for general working capital and other requirements. Tata Steel didn’t comment on the timing of the commercial paper issuance.
For Bhushan Power & Steel, Tata Steel is believed to have offered an immediate upfront payment of Rs 175 billion to financial creditors. The total bid value, however, is likely to be Rs 245 billion.