Calcutta: The first of the 12 big bankruptcy cases has been resolved with Tata Steel taking control of troubled Bhushan Steel after forking out Rs 35,200 crore to the firm's financial creditors.

Bhushan Steel was among the so-called Dirty Dozen - large debt-defaulting companies picked from the rubble of toxic assets that banks had on their books - that had been referred to the National Company Law Tribunal (NCLT) for resolution last July.

The State Bank of India, which had lent the most to Bhushan Steel, had dragged the company to the tribunal last July 26. The tribunal passed the order in favour of a resolution plan submitted by the Tatas on May 15.

The Tatas made the pay ment to the lenders and secured control of Bhushan Steel's assets on Friday.

None of the other 11 cases is anywhere near resolution under the Insolvency & Bankruptcy Code, 2016, which lays down a strict, 270-day time limit for settlement. The Bhushan Steel case was wrapped up in 291 days.

Shortly after the takeover of the 5.6-million-tonne steel asset, Tata Steel Group managing director T.V. Narendran told The Telegraph: "Tata Steel is now the new owner of Bhushan Steel and is, in a sense, operating them from Friday. We have paid the creditors and subscribed to the shares. Our team has reached the three plants of Bhushan Steel and, as we speak, is talking to the existing employees. We have moved in."

Piyush Goyal, in charge of the finance ministry now, tweeted: "Congrats to PM @narendramodi ji & @arunjaitley ji for a historic breakthrough in resolving legacy issues of Banks. Lenders recovered almost entire principal loan of Bhushan Steel through Rs 36,400 cr transparent bid by Tata Steel and also got 12% stake in the company."

The 12 bankruptcy cases had been referred to the tribunal at the behest of the RBI after the discussions over debt repayment by the defaulting promoters got stuck over demands for a "haircut", which requires banks to willingly forgo a part of their claims.

Banks were leery about taking such a commercial decision without the stamp of judicial approval - which the bankruptcy process now provides - fearing that federal investigative agencies could later accuse them of having favoured some or other promoter.

Bhushan Steel owed Rs 56,080 crore to its financial creditors. The Tatas have agreed to pay Rs 35,200 crore to the lenders who have written off the remaining 37 per cent of the overall debt from their books.

The Tatas have also decided to pay Bhushan Steel's operational creditors, such as vendors, another Rs 1,200 crore over the next 12 months.

Under a novation agreement, Tata Steel has also bought the unpaid debt from the lenders for just Rs 100 crore.

Additionally, Tata Steel has subscribed to Rs 158.89 crore worth of shares, thereby taking its stake in Bhushan Steel to 72.65 per cent. The lenders have converted Rs 14.4 crore worth of loan into equity. The Tatas have appointed three directors on the board of Bhushan Steel.

The Tatas will be raising inter-corporate loans worth Rs 34,973.69 crore to finance the deal.

Narendran said 10 to 15 people from the Tata group had moved to the three main manufacturing locations in Angul (Odisha), Shahibabad (near Delhi) and Khopoli in the Raigad district of Maharashtra. The Tatas have decided to retain all the existing Bhushan Steel employees.

"Bhushan is now producing 3.5 million tonnes of steel. Our effort would first be to take it to full capacity and operate with the same efficiency as we have done in Jamshedpur and Kalinganagar," Narendran said.

But one problem looms. Neeraj Singhal, the erstwhile promoter of Bhushan Steel, has challenged the tribunal order before the appellate tribunal. The matter is due to come up for hearing next week.

Narendran said Tata Steel had filed a caveat and, therefore, its submission would have to be heard before any judgment is passed.