Singal family resolves Bhushan ownership issues

MUMBAI: Brij Bhushan Singal, chairman of Bhushan Steel has finally managed to settle family feud between his sons Sanjay and Neeraj with respect to their cross-holdings in listed Bhushan Steel and unlisted Bhushan Power and Steel Ltd. As per the agreement, senior Singal has given up his one-third stake in Bhushan Power and Steel Ltd in favour of his elder son and Sanjay will not have claim in his father’s one-third stake in Bhushan Steel. Both Neeraj and Sanjay transferred their personal holdings in each others firm and the family assets were apportioned equally between the estranged brothers and their father. With this move Bhushan Steel will be able to expand its share capital base and raise funds, while Bhushan Power and Steel is looking to tap the capital markets in 2012. Confirming this move Sanjay Singal, chairman of Bhushan Power and Steel told TOI, “We have amicably settled the long pending dispute. I will have no claim over my father’s holding in Bhushan Steel and will independently manage Bhushan Power and Steel, while my father with Neeraj will manage Bhushan steel.”As per the 2002 family agreement, Sanjay was to manage Bhushan Power and Steel and Neeraj was to manage Bhushan Steel, while their father Brij Bhushan Singal was supposed to have one-third stake in both firms. When asked about how the personal family assets have been apportioned, Sanjay said, “They would value roughly about Rs 300 crore and has been divided equally between my father, Neeraj and me.”“Bhushan Steel has shareholders approval to expand its capital base. After this settlement, we can go ahead with that as the court embargo with respect to expanding share capital base goes. We may do it by way of QIP, right issuance or GDRs,” said Bhushan Steel CFO Nitin Johari.“We have transferred our cross-holdings in each other companies paving the way for an amicable settlement. My father has given up his one-third stake in Bhushan Power and Steel and will continue to hold over a third stake in Bhushan Steel. Sanjay will have no claim in father’s stake in Bhushan Steel,” said Neeraj Singal, V-C and MD of Bhushan Steel, adding that it was long pending and father wanted it to settle as no one gains from courtroom battles.Investment advisor S P Tulsian believes that there had been a cash outgo to Sanjay for this settlement, without which the settlement was not possible. “Bhushan Steel earlier wanted to sell a part of the stake but that attempt was thwarted by Sanjay,” said Tulsian. Bhushan Steel has a market cap of $1.3 billion (Rs 6,800 crore) going by Tuesday’s share price of Rs 320, while Bhushan Power and Steel has annual sales of $1.1 billion.