India: SSG Capital eyeing stake in debt-laden Bhushan Steel

Photo: Reuters

Asia-focused special situations investment firm SSG Capital Management is interested in acquiring a stake in distressed steel company Bhushan Steel Ltd, said two people aware of the development.

“Bhushan Steel promoters have been out in the market to bring in an investor who can bring in equity capital of at least around Rs900 crore. SSG is one of the financial investors that has shown an interest in the asset and has been in talks with the promoters,” said one of the two people cited above, requesting anonymity as he is not authorized to speak to reporters.

Bhushan Steel’s total debt stands at around Rs42,355 crore as of 31 March.

However, the chances of the talks resulting in a deal have been slowed down as the National Company Law Tribunal (NCLT) admitted an insolvency case filed against the firm by State Bank of India.

“While SSG is interested in the asset, given that the case has been admitted in the NCLT, they will now have to wait for the process to take its course, and wait for the insolvency professional to come up with a resolution plan,” said the second person cited above, also requesting anonymity.

Since the plea has been admitted by the NCLT, there is a 180-day timeline, which can be extended up to 270 days, to decide on a resolution plan in accordance with the Insolvency and Bankruptcy Code (IBC), 2016.

SBI has claimed recovery of Rs4,295 crore from Bhushan Steel and $490 million for a foreign currency loan.

The NCLT on 26 July allowed banks to initiate insolvency proceedings against Bhushan Steel.

Bhushan Steel Ltd had reported a negative net worth as on 31 March. It showed losses of Rs3,440.5 crore for the fiscal 2017. Its net worth stood at a negative Rs1,484.2 crore.

Emails sent to Neeraj Singal, managing director and chief executive officer at Bhushan Steel, and SSG Capital did not elicit any response.

Bankruptcy proceedings have also been initiated against other companies, including Electrosteel Steels Ltd, Lanco Infratech Ltd, Alok Industries Ltd and Jyoti Structures Ltd, which are among the 12 non-performing assets or bad loan cases identified by the Reserve Bank of India. The 12 accounts alone constitute a quarter of the over Rs8 trillion of NPAs. These accounts have an exposure of more than Rs5,000 crore each, with 60% or more classified as bad loans by banks as of March 2016.

SSG is currently one of the most active financial investors in the distressed assets space in India.

On 24 July, Mint reported that the Asia-focused special situations investment firm founded by former Lehman Brothers executives, is raising close to $2 billion across two Asia-focused new funds.

SSG Capital is raising funds for two strategies, namely special situations and private credit, for which they are looking to raise about $1 billion each.

The new funds will provide SSG the firepower to take advantage of the opportunity created by the almost Rs10 trillion non-performing loans mess in the Indian banking system.

Last year, SSG had offered to buy a little less than half of Ruias-promoted Essar Steel Ltd’s rupee debt through Asset Care and Reconstruction Enterprise Ltd (ACRE), where it owns 49%, Mint reported. However, the deal was not struck.

SSG’s investments in India include ACRE, Amtek Auto’s debentures which it bought from JPMorgan Asset Management Co. and investments in real estate.

Also Read:

Asia-focused SSG Capital to raise $2b for special situations, private credit lending

This article was first published on LiveMint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.