Mumbai: JSW Steel Ltd will not be able to seek an equity partner in the initial stage of its acquisition of bankrupt Bhushan Power and Steel Ltd (BPSL), said a senior company executive.

Recent rulings by courts under the Insolvency and Bankruptcy Code (IBC) state that the structure of a resolution applicant, whether as an individual or a consortium, has to be maintained from the time of submitting an expression of interest till the completion of the deal, M.V.S. Seshagiri Rao, joint managing director and group chief financial officer, JSW Steel said in an interview last week.

JSW Steel made the highest bid for BPSL, with an upfront cash payment of 19,350 crore to the lenders of BPSL, and an equity infusion of 350 crore to revive the steel mill’s operations. In early February, JSW Steel received the Letter of Intent from the resolution professional, recommending the sale of the distressed plant to the Sajjan Jindal-promoted steel major. The transaction is awaiting the approval of the National Company Law Tribunal (NCLT)

“When Bhushan Power was initially referred to the NCLT, we thought the transaction would close by 31 March, but the way the hearings have been going on, it has been very slow," Rao said on the sidelines of Mint India Investment Summit which concluded on 1 March.

“Initially, it will not be possible to bring a partner in the way we were saying earlier, since we had submitted the bid on our own. We will have to complete the transaction...maybe afterwards, we can bring somebody in."

On 25 October, directors of JSW Steel approved in-principle a rights issue of up to 5,000 crore to fund the potential acquisition of BPSL. Besides, the management had indicated that were it to win the asset, it would bring in a financial partner to partly finance the acquisition cost. However, now it seems that JSW Steel will have to fork out the entire cost of acquisition on its own.

BPSL operates a 3.5 million tonne plant in Odisha.

Bhushan Power will be JSW’s second acquisition of a steel mill under the IBC.

Last July, JSW Steel bagged 1.5 million tonnes of Monnet Ispat’s steel-making capacity in Chattisgarh for 2,875 crore. An additional 1,000 crore was pledged as equity and working capital infusion. The acquisition was made through a 30:70 joint venture between JSW Steel and Aion Capital.

In a separate development, on Saturday, JSW Steel announced that the company has closed a $700 million, five-year advance payment and supply agreement with steel trading firm Duferco International Trading Holding SA, which would offer JSW Steel a committed export market for its products.