'Power pacts between Bhushan Steel, Bhushan Energy under discussion'

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Tata Steel said on Tuesday that the existing power purchase pact between Bhushan Steel, the debt-laden company which it acquired, and Bhushan Energy is in under discussion.

The statement comes amid reports that Tata Steel has started the process of cancelling PPAs between Bhushan Steel and Bhushan Energy in a bid to cut costs.

"Bhushan Steel has a contract (power purchase agreement) with another company BEL (Bhushan Energy Ltd). There are some discussions going on at this stage so nothing has happened as yet. There is discussion regarding the contract," Tata Steel President --Steel business and Total Quality Management (TQM)-- Anand Sen said.

Sen further said, "Yes, the company feels that it could be little bit more economical so they are examining the contract and discussing with the owners of BEL to have more beneficial contract on both parties."

BEL is a subsidiary of Bhushan Steel Ltd.

When asked it the company has begun the process of cancelling PPA, Sen said that "I don't know whether power purchase agreement is being cancelled or not but we have a power agreement with a company Bhushan Power that contract is under discussion."

Bamnipal Steel Ltd (BNPL), a wholly-owned subsidiary of Tata Steel, had earlier successfully completed the acquisition of controlling stake of 72.65 per cent in Bhushan Steel Ltd.

Tata Steel Ltd had won the bid to acquire debt-laden Bhushan Steel Ltd through the insolvency process.

The bankrupt firm was among the 12 stressed assets the RBI had referred for NCLT proceedings last year.