JSW Steel shares crash over 7% on reports of Supreme Court scrapping resolution plan for Bhushan Power and Steel

Stock Market Today: JSW Steel share price crashed over 7% on Friday as news reports suggested that Supreme Court has scrappedresolution plan for Bhushan Steel and Power

According to a Friday report by television channel CNBC-TV18, The Supreme Court of India has rejected JSW Steel's resolution plan to buy Bhushan Power and Steel four years after the acquisition completion and ordered the liquidation of the indebted steelmaker Bhushan Power and Steel

The news reports suggested that JSW Steel's ₹19,700-crore resolution plan for Bhushan Power and Steel Ltd (BPSL) was scrapped by the Supreme Court, which instead mandated that the indebted business be liquidated.

Exchange Seeks clarification

The Exchange meanwhile has sought clarification from JSW Steel Ltd on May 2, 2025, with reference to news appeared in www.moneycontrol.com dated May 2, 2 025 quoting "Setback for JSW Steel as SC directs liquidation of Bhushan Power and Steel".

JSW Steel's clarification on the Exchanges

JSW Steel in its reply to the Exchanges said that “We learnt that the Hon’ble Supreme Court pronounced Judgment today i.e 02-05-2025 rejecting the Resolution plan submitted by the Company and approved by NCLAT, on certain grounds”.

JSW Steel thereafter added that it is yet to receive the formal copy of the Order to understand the grounds for rejection in detail and its implications. Once it receives the Order and is able to review the same along with its legal advisors, the company will decide on our further course of action.

Reasons cited by reports for the Supreme court decision

Two main factors were noted in the ruling by the courts as per the news report. One was JSW's failure to execute the plan within the timeframe required by insolvency law and other was its use of a combination of equity and optionally convertible debentures (OCDs) to complete the takeover, when it should have been done entirely with equity.

JSW's acquisition of BPSL

In one of largest insolvency proceedings in India, JSW Steel had emerged as the successful resolution applicant for Bhushan Power and Steel, however the legal proceeding had continued ever since

JSW Steel had acquired a 49% stake in BPSL through the IBC route in 2019 while completed the acquisition in 2021. The acquisition had Helped JSW steel add 2.75 million tonnes per annum (mtpa) of Steel Making capacity along with opportunities for expansions JSW thereafter also increased its stake to 83.3% effective October 1, 2021.

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