India’s Supreme Court has rejected JSW Steel Ltd.’s acquisition of Bhushan Power & Steel Ltd. (BPSL), a deal that was completed nearly four years ago, citing violations of the country’s bankruptcy laws. The court has now ordered the liquidation of the heavily indebted company.
Although the Committee of Creditors (CoC) had previously approved the resolution plan, the apex court ruled that it breached insolvency regulations. Specifically, the court objected to JSW Steel’s use of a funding mix involving equity and optionally convertible debentures (OCDs) instead of using equity alone, as required under the law. It also highlighted delays in executing the resolution plan within the mandated timeframe.
The ruling marks a significant setback for JSW Steel, which had pursued the acquisition through India’s insolvency process in a bid to expand its capacity. In response, JSW Steel issued a statement saying it has not yet received the formal court order and will assess the ruling in detail upon receipt. The company added that it will consult with legal advisors to determine the next steps.