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Tata’s Bhushan Steel buyout to reduce PSB bad loans by Rs 35,000 crore

Last week, Tata Steel, through its subsidiary, completed the acquisition of controlling stake of 72.65% in Bhushan Steel for around Rs 36,400 crore after emerging as the winning bidder in an insolvency auction.

business Updated: May 21, 2018 11:07 IST
Press Trust of India
Press Trust of India
Press Trust of India, New Delhi
Bhushan Steel,Tata Steel,IBC
Men ride their bicycles in front of the Bhushan Steel plant in the eastern Indian state of Odisha (REUTERS File Photo)

The acquisition of debt-laden Bhushan Steel, under the Insolvency and Bankruptcy Code (IBC) framework, will reduce bad loans of public sector banks by Rs 35,000 crore, financial services secretary Rajeev Kumar said on Monday

“IBC transforming credit culture in NewIndia. About Rs 35,000 crore reduction of NPAs of PSBs in Bhushan Steel case. Reduction of NPAs in individual PSBs range from about Rs 500 crore to over Rs 10,000 crore, he tweeted.

Last week, Tata Steel, through its subsidiary, completed the acquisition of controlling stake of 72.65% in Bhushan Steel for around Rs 36,400 crore after emerging as the winning bidder in an insolvency auction. Kumar said following the Bhusan Steel buyout, public sector banks (PSBs) will write back Rs 7,500 crore of loans which were earlier classified as NPAs.

“Future upside through over 6 crore equity shares acquired by PSBs. Decisive shift towards clean credit culture,” Kumar tweeted.

Last week, finance minister Piyush Goyal had tweeted that the acquisition was a “historic breakthrough in resolving legacy issues of banks”.