In a recent interim verbal order, India’s Supreme Court did just that. This ruling would profoundly affect JSW Steel’s scheme to purchase Bhushan Power. Since the relief sought in the ruling was against the backdrop of an ongoing insolvency case, it has resulted in quashing of JSW Steel’s acquisition bid. The company is currently waiting to receive a formal copy of the order. They want to know what the court was thinking and what that might mean for them.
In addition, JSW Steel has made clear that they are still seeking clarity on the basis for the rejection. A spokesperson for the company added, “If we get an order, we intend to act. At that point, they’ll decide what the next steps should be. This language indicates the company’s desire to gauge its fortunes based on the particulars included in the actual formal order.
The Supreme Court’s verbal order indicates that the insolvency administrator and the lenders’ panel involved in the case failed to comply with their legal obligations. This blunder raises questions about the type of negotiation approaches employed during the acquisition. Beyond bad faith, it is a major indictment of how the entire insolvency case was handled.
The operational segment of Bhushan Power consists of three units with a combined 1.8 gigawatts (GW) of capacity. These units continue to be collateralized by long and medium-term power purchase agreements. This new set-up underscores their growing strategic importance – every homegrown sector. The Supreme Court’s decision may well be very important for JSW Steel. Second, it can shape how such power units will be operated in the future.
Attorneys working on the case asked for the use of cookers’ real names to be withheld, due to the contested nature of the lawsuit. Their perspective on the case and its implications are invaluable as advocates and stakeholders continue to chart the course through this evolving landscape.
While JSW Steel waits to hear more, industry analysts will be watching closely the developments in this case. This result might significantly alter the fortunes for JSW Steel and Bhushan Power. Besides being a beacon of hope for green steel itself, it can shape deeper trends in India’s steel and energy markets.
