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India's national tribunal approves Tata Steel's acquisition of Bhushan stake

The national company law tribunal approved Tata Steel Ltd.'s purchase of a controlling stake in Bhushan Steel Ltd., to be funded through equity and intercorporate loans, Tata said May 15.

Under the resolution plan, Tata unit Bamnipal Steel Ltd. will initially subscribe to 72.65% equity stake in Bhushan at the face value share price of 2 Indian rupees apiece for a total of 1.59 billion rupees.

The financial creditors will receive 352 billion rupees to settle Bhushan's existing debt.

As part of the consideration, up to 90 billion rupees of loans carry the option to be converted into Bhushan common shares.

The settlement funds will also be used to repay the costs of the corporate insolvency resolution process and employee dues.

Additionally, the creditors will receive common shares, converted from loans, worth a total of 145 million rupees priced at 2 rupees per share. The resolution plan also requires creditors to invoke a pledge on existing equity Bhushan shares.

Bamnipal will purchase the outstanding redeemable preference shares of Bhushan for a token price of 100 rupees.

The deal requires final approval from the Competition Commission of India.

As of May 15, US$1 was equivalent to 68.26 Indian rupees.