India's Supreme Court has halted the liquidation of Bhushan Power and Steel (BPSL) and has allowed domestic firm JSW Steel, which owns the 4.5mn t/yr unit, to file a review petition.
A court order at the start of May annulled JSW Steel's 197bn rupee ($2.3bn) takeover of BPSL, concluded over four years ago, and directed the National Company Law Tribunal to start liquidation proceedings. The court cited delayed payments to creditors and violations of the bankruptcy code by JSW Steel as the reason for the revocation of the deal.
The Supreme Court on 26 May ordered a "status quo" on the pending proceedings following an appeal by JSW Steel, which said it had the right to submit a review petition and that such a submission was underway. JSW's legal representative also noted that the limitation period to file such a petition had not expired, according to the court document.
The court said a stay on the liquidation proceedings was necessary "to avoid future legal complications." The status quo order would act as an "interim arrangement" pending JSW Steel's review petition, according to the court.
BPSL makes both flat and long steel products and accounts for about 13pc of JSW's total domestic steelmaking capacity, including projects under commissioning. JSW Steel, which is targeting production capacity of 50mn t/yr in India by the fiscal year ending March 2031, said the previous liquidation order had not yet affected output or sales at BPSL.
