MUMBAI: In a desperate bid to salvage his company from going under the hammer next week, Neeraj Singhal, vice-chairman of Bhushan Steel, has written to all lenders to consider restructuring the Rs 44,000 crore debt under the Sustainable Structuring of Stressed Assets (S4A) mechanism by dividing the debt into sustainable and unsustainable parts with no haircut whatsoever even at this stage.The letter, written on January 29, alleges that the company was wrongly dragged into IBC under the National Company Law Tribunal despite its debt restructuring mechanism under S4A was on the last lap. ET has reviewed the letter.The lenders had undertaken a series of due diligence exercises and forensic studies by agencies as diverse as MN Dastur (TEV Study), Deloitte (4 years forensic audit) “and found no malfeasance on promoters and the company”. The Deloitte report, according to the Bhushan management, was further vetted and confirmed by the lender’s legal counsel Shardul Amarchand Mangaldas in the steering committee meetings held in December 2016 and further accepted by the joint lenders forum in a meeting dated December 5, 2016. The proposal to restructure apparently had the blessings of most lenders. “As late as 15.06.2007, SBI called for a JLF for adoption of S4A as the debt resolution plan by JLF,” Singhal wrote, adding, RBI on June 13,, 2016, directed for initiation of bankruptcy proceedings against the company. “It appears the above facts and status of the debt resolution plan was not noted by the RBI including the name of company in list of first 12 accounts for initiating insolvency proceedings.” Bhushan Steel — one of the largest non-performing assets in the Indian banking system — was taken to the NCLT after it failed to repay banks.62731215 Singhal argues that barring Tata Steel and JSW, most mills have been under stress, so it is not a “promoter/company problem”. More importantly, in case of debt restructuring under the S4A scheme, there is virtually no loss to lenders unlike the bankruptcy proceedings under IBC where banks are being forced to sell companies at huge haircuts. According to the earlier restructuring proposal, more than half the debt was sustainable and proposed to be serviced along with interest. Also, there would be no principal loss at all, as balance unsustainable portion of the debt was to be repaid by converting it into a long dated instrument. The interest loss on the unsustainable debt were to be compensated by way of 50% of promoter’s equity transferred to the lenders “on which huge equity upside would have covered the interest loss and additionally the promoters shall be willing to pledge their equity”.The promoters own 57.82% of the company. Of which 71% is pledged with banks and other financial institutions. The current market cap of Bhushan Steel is Rs 1,159.74 crore. With the steel sector looking up, Singhal has urged banks not to sell assets at deep discounts and instead hold on to the equity of these companies and earn future upsides. His proposal of transferring promoter equity would also give the lenders control over the company. “No haircut would ensure safeguard to lenders from any question that may be asked in future,” he wrote. “We are also agreeable if the lenders intend to have joint management sort of structure by inducting their representatives and chairman on the board of the company.”Attempts to reach Neeraj Singhal via email, text messages remained unsuccessful till the time of going to press. Bhushan Steel, with a capacity of 5MT per annum, has seen frenzied interest from bidders such as JFEJSW, Arcelor Mittal-Nippon Steel, Vedanta, Tata Steel, Bain-Piramal, among others. The resolution professional has set the liquidation value at Rs 15,000 crore.Lawyers specialising in bankruptcy said typically once admitted under NCLT, there is no mechanism to withdraw the application as these are representative suits involving all stakeholders. “However in some cases, where settlements have happened between the applicant and the corporate debtor, the Supreme Court has interfered under Article 142 of the Constitution on the basis of complete justice have permitted withdrawal,” said Alok Dhir, Managing Partner, Dhir & Dhir Associates. “NCLT does not have that leeway, only the apex court does. But taking a cue, NCLTs have also started permitting withdrawal of matters post settlements. Even SC has directed the government to amend the IBC to permit withdrawal of cases… However, settlement in this case means full and final and not a scheme or a restructuring mechanism.”In an earlier interaction with ET, Singhal had echoed a similar sentiment saying promoters who put in their sweat equity to create greenfield assets is always the best bidder.