Tata Steel is said to have emerged as the highest bidder for Bhushan Power and Steel with an offer to pay Rs17,000 crore to lenders and infuse additional cash of Rs7,000 crore for working capital and payments to operational creditors and employees. Photo: Reuters
New Delhi: The National Company Law Tribunal (NCLT) on Monday asked the Committee of Creditors (COC) to submit its reply to the petition filed by UK-based Liberty House by Friday.
The court was hearing the petition filed by Liberty House against the COC’s decision for not opening its bid for Bhushan Power and Steel and outrightly rejecting it.
Liberty House claims that its bid is valid as it was submitted within the 270-day time frame stipulated by the Insolvency and Bankruptcy Code (IBC). The two-member bench at NCLT also asked the COC to submit a detailed date-wise development from 20 November last year to 8 February.
The last date for submission of bids was 8 February.
The bid was rejected by the legal team of the interim resolution professional (IRP) without opening as it was submitted on 20 February, much after the 8 February deadline set by the IRP for submission of bids.
Liberty House approached NCLT on 22 February following the rejection.
The next hearing of the case is scheduled on 5 March.
Liberty House has also contended that the committee of creditors should have the ultimate right to reject the bid and not the resolution professional. Two other bidders who submitted the bids for Bhushan Power are JSW Steel Ltd and Tata Steel Ltd. Both submitted bids before the deadline.
Tata Steel is said to have emerged as the highest bidder for Sanjay Singhal-owned Bhushan Power and Steel with an offer to pay Rs17,000 crore to lenders and infuse additional cash of Rs7,000 crore for working capital and payments to operational creditors and employees.
JSW made an offer of Rs11,000 crore to the lenders and Rs2,000 crore for the operations of the beleaguered power firm. The COC informed NCLT that it will meet on 6 March to take the process forward, including declaration of the highest bidder.
Under IBC, cases once admitted are supposed to be resolved within 270 days; if not, companies go into liquidation. During the resolution process, management control is taken away from promoters and vested with a resolution professional.
Bhushan Power, which owes at least Rs37,000 crore to a consortium of lenders led by state-run Punjab National Bank (PNB), is among the 12 large companies identified by the Reserve Bank of India (RBI) for early insolvency resolution.
Mint on 9 February reported that the liquidation value and the fair value for Bhushan Power have been fixed at Rs9,000 crore and Rs24,000 crore, respectively.
