Banks Demand JSW Steel to Pay EBITDA Earned from Bhushan Power: Here's Why

Creditors of debt-ridden Bhushan Power & Steel Ltd (BPSL) have reportedly changed their stance before the Supreme Court. They are now demanding operating profits, also known as earnings before interest, taxes, depreciation, and amortisation (EBITDA) and interest on the same from JSW Steel. The demand comes just days after the apex court agreed to review its earlier decision to cancel BPSL’s insolvency buyout by the Sajjan Jindal-led firm.

According to a CNBC-TV18 report, until May, banks had told the Supreme Court they were open to allowing BPSL’s EBITDA to remain with JSW Steel. However, they have since reversed their position and are now insisting that the EBITDA generated during the Insolvency and Bankruptcy Code (IBC) process be allocated to the creditors.

The banks argue that this EBITDA amounts to “thousands of crores” and are also seeking interest payments for delays in implementing the resolution plan.

They told the court that while they support the resolution plan, they oppose any form of unjust enrichment. According to the report, under the current terms, JSW Steel would gain ₹19,000 crore along with BPSL’s EBITDA during the insolvency period.

The company’s shares were down about 2% to ₹1,045.90 at 2:25 PM.

On July 31, the Supreme Court agreed to hear review petitions filed by JSW Steel and the lenders in the BPSL insolvency case, stating that its earlier ruling required reconsideration. The court emphasised that liquidation should be a last resort—especially since the company now employs 25,000 workers and has witnessed substantial capital investment and a ramp-up in production since JSW took over.

The earlier ruling, delivered on May 2 by Justices Bela Trivedi and Ujjal Bhuyan, had struck down the resolution plan approved by the Committee of Creditors, calling it a violation of the IBC and ordering the liquidation of BPSL.

JSW Steel was selected as the successful resolution applicant in 2019, with its plan approved by the NCLT and later upheld by the NCLAT, despite objections from the Enforcement Directorate (ED).