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Tata Steel moved ahead in acquiring Bhushan Steel Ltd by announcing that is will mobilise Rs 16,500 crore through debt instruments to fund it.

The fund to be gained from the banks amounts to Rs 32,500 crore for acquisition of BSL.

"The remaining amount will be raised through internal resources", said Tata Steel.

"The banks, according to industry experts, are expected to take a whopping haircut of about 30-35 percent in the sale of BSL to an arm of Tata Steel. However, Tata Steel refused to comment on the haircut taken by the banks and financial institutions", said a PTI report.

PTI quotes Tata Steel saying "We will be paying a total consideration of Rs 35,200 crores. This is expected to give us about 72.65 percent equity in the company and close to 100 percent of economic interest in the company because of the way in which the transaction has been structured." 

Tata Steel has calculated that BSL, a bankrupt firm, has about Rs 16,500 crore of secured debt. Incidentally, this company had won the bid to acquire debt-laden BSL.

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