Bhushan Steel in talks with banks for debt restructuring

20 March 2015

Bhushan Steel has said it is in talks with banks for restructuring of debt to the tune of $3.7 billion (about Rs 23,000 crore).

"The matter regarding realignment of debt maturity profile is at discussion stage with the bankers. The relevant information in this regard would certainly be announced... as soon as the same is finalised and approved by the bankers concerned," Bhushan Steel said in a filing to the BSE.

A consortium of bankers led by Punjab National Bank (PNB) has a total exposure of about Rs 40,000 crore in the company.

Besides PNB, the other banks include State Bank of India, Canara BankBSE -1.61 %, Bank of India and Dena BankBSE -2.22 %.

An extension of maturity will help banks in making lower provision for the loan given to the debt-ridden steel manufacturer.

It may be noted that last August Bhushan Steel Vice Chairman and Managing Director Neeraj Singal was arrested by the CBI in an alleged cash-for-loan scam involving the then Syndicate Bank chairman and managing director S K Jain, who was later suspended by the government.

After the arrest, lenders formed a committee with officials from various banks, which are closely monitoring the functioning of the company. They had also appointed some new directors to the company's board.