MUMBAI, Sept 5 (Reuters) - An Indian court on Thursday cleared JSW Steel Ltd’s takeover plan for debt-ridden Bhushan Power and Steel, bringing an end to a bankruptcy case that has dragged on over two years.
The move paves the way for JSW Steel, which has the biggest steel capacity in India, to take control of a steel asset in the east of the country where rival Tata Steel Ltd and Steel Authority of India Ltd have long dominated.
The National Company Law Tribunal (NCLT) in New Delhi said it approved the debt resolution plan of JSW Steel, according to a copy of the judgment.
The ruling means JSW Steel can make its first major steel company acquisition under a new bankruptcy regime in India, where competition for cheap assets has been stiff between local rivals and global majors.
ArcelorMittal has also been entangled in court cases about two years and is awaiting a final order to acquire Essar Steel, which has a 10 million tonne-a-year plant that was one of the biggest steel assets to become available under new bankruptcy laws.
India's Punjab National Bank initiated criminal proceedings against the former board of directors of Bhushan Power after the bank discovered a 38 billion rupees ($529 million) fraud here in the account of the company.
The NCLT said investigations and any subsequent criminal proceedings would not affect the resolution plan of JSW Steel, which had asked for immunity from the fraud case.
JSW Steel spokesman said the company was reviewing the judgement and would make an announcement on Friday.
Bhushan Power runs a 3.5 million tonne steel plant in eastern India along with a 500 megawatt power plant for internal use.
$1 = 71.8162 Indian rupees Reporting by Promit Mukherjee Editing by Edmund Blair