Debt mess: Bhushan Steel asked to sell Dhenkanal plant
Mumbai: Creditors of debt-laden Bhushan Steel have reportedly asked the company to sell its steel plant in Dhenkanal to raise cash and repay some loans.
According to reports in national media, the suggestion was put forward by the creditors to the company at a meeting of a core group of lenders with Bhushan Steel’s management earlier this month.
“The Odisha plant will have to go. Liquidity is anyway tight, this sale should be able to reduce some of the debt and get some cash flowing so things can move in the right direction,” one of the persons told Mint cited above, a senior official at a public sector bank. He requested anonymity because the discussions were confidential.
Bankers estimate that selling the plant could raise about Rs.15,000 crore, less than half the debt of Bhushan Steel at the end of the last financial year. As of 31 March, the company had debt of Rs.35,226 crore.
“No meeting of Joint Lenders’ Forum (JLF) of Bhushan Steel has happened in this month,” a spokesperson for the company said in a one-line response to an email seeking details of the lenders’ meeting with the company and the suggestion to sell the Odisha plant.
All three bankers quoted above, however, said the core committee of bankers met with the company’s management in the second week of November.