JSW Steel Shares Slide 6% After SC Labels Bhushan Power's Resolution Plan 'Illegal'

JSW Steel's share price dropped over 6% on Friday after the Supreme Court rejected the resolution plan for Bhushan Power and Steel Ltd (BPSL). The apex court called the RP 'illegal' and that the plan should not have been accepted by the Committee of Creditors (CoC). The court has mandated the liquidation of BPSL.

At 12:35 pm, JSW steel shares were trading at Rs 962.70 price level, down by over 6.52% on the National Stock Exchange.

The court even called JSW Steel's intentions "malafide and dishonest" for exploiting the ongoing Enforcement Directorate (ED) investigations to its benefit and delaying the implementation of the resolution plan for two years, as per a report by Reuters.

A bench headed by Justice Bela Trivedi stated that "the respondents JSW Steel, committee of creditors (CoC) and the resolution professional sought to sweep many seminal issues under the carpet" to conceal several issues.

More About the Resolution Plan

JSW Steel had earlier proposed to pay Rs 19,350 crore to financial creditors as part of its resolution plan. For operational creditors, JSW offered Rs 350 crore, even though their admitted claims stood at Rs 733 crore. The National Company Law Tribunal (NCLT) gave a conditional approval to JSW’s resolution plan for Bhushan Power & Steel on September 5, 2019, under the ongoing corporate insolvency process.

The recent order by the apex court comes as a major blow to JSW Steel, as was visible in the share price movement. The bench headed by added that the resolution professional had completely failed to fulfill the legal responsibilities assigned to him under the Code.

The bench headed by Trivedi added that the resolution professional had completely failed to fulfill the legal responsibilities assigned to him under the Code.

In the last 6 months, the shares of the steel-maker have remained largely range bound, marginally up by over a percent.