The principal bench of the National Company Law Tribunal (NCLT) has allowed the State Bank of India’s petition to initiate insolvency proceedings against Bhushan Power and Steel’s (BPSL) former promoter Sanjay Singhal and his wife Aarti Singhal Creditors are seeking to get Rs 12,000 crore from insolvency proceedings against them, sources told DH.
This is being done by invoking personal guarantees given by Sanjay Singhal and Aarti Singhal. SBI had filed a petition through the resolution
professional.
According to the insolvency and bankruptcy code (IBC), lenders can take erstwhile promoters or any guarantors to the corporate debtor to retrieve their dues.
JSW took over Bhushan Power and Steel for Rs 19,350 crore earlier this year ending three years of uncertainty over the stressed assets.
Through the resolution, lenders to the company were to realise 41 per cent of their dues.
JSW funded the transaction through a mix of equity and debt. As a part of the payment, Rs 8,614 crore in Piombino Steel (PSL) was arranged through a mix of equity, optionally convertible instruments and debt.
Out of this amount, Rs 8,550 crore was invested in a special purpose vehicle (SPV), Makler, the bidding company.
The remaining Rs 10,800 crore was funded through debt.
Some leading banks had exposure to the company like the State Bank of India, which had an exposure of Rs 9,825 crore while PNB had an exposure of Rs 7,355 crore.
The company was brought under the insolvency and bankruptcy code after it failed to pay its dues.
Check out latest DH videos here