JSW’s $2.2 Billion Bhushan Power Deal Upheld by Top Court

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India’s top court affirmed JSW Steel Ltd.’s 197 billion rupees ($2.2 billion) acquisition of debt-laden rival Bhushan Power & Steel Ltd., after reviewing its earlier judgment quashing the deal.

A three-judge bench headed by the Chief Justice of India B.R. Gavai Friday upheld the validity of the acquisition by JSW through a debt resolution process. The court also rejected the lenders’ demand for additional payments from JSW, India’s biggest steelmaker. 

“Permitting any claims to be reopened will amount to committing violence on the provisions of the law,” the court said in its verdict. It added that the delay cannot be attributed to JSW, as it was caught in legal proceedings over the deal. Lenders were seeking more money to account for JSW’s earnings from Bhushan Power during the period of delay in acquisition. 

The ruling is a major relief for tycoon Sajjan Jindal’s company, which now counts Bhushan Power as its subsidiary, has boosted annual crude steel capacity of the unit by nearly 65% after completing the acquisition in 2021. JSW shares surged as much as 1.7% after the order, but erased the gains later.

“We therefore do not find any merit in the contentions,” which, if accepted, will defeat the purpose for which the bankruptcy laws were enacted, the judges wrote in the order, upholding the resolution plan. The results would be “disastrous” if appeals to reject the deal or allowing additional payments are allowed, it added.

In July, a two-judge bench headed by Gavai had recalled the Supreme Court’s order rejecting JSW’s plan, calling it a fit case where the judgment needs to be heard afresh. In May, the court had rejected the acquisition, saying it didn’t conform to India’s bankruptcy laws and ordered liquidation of Bhushan Power. JSW, along with some lenders, had sought a review of this decision.

India’s legal process allows review of a top court judgment only on some limited grounds such as apparent errors.

(Updates with details from order in fifth paragraph.)

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