Even though it is yet to take a call on whether the late submission of bid by Liberty House for the bankrupt Bhushan Power and Steel is valid or not, the National Company Law Appellate Tribunal (NCLAT) on Friday directed the committee of creditors (CoC) to convene its meeting, consider all the three bids — from Tata Steel, JSW Steel and Liberty House — decide the H1 and H2 bidders and submit the proposal to the National Company Law Tribunal for adjudication. However, it said that while the NCLT may decide which is the better bid — H1 or H2 — based on the recommendation of the CoC, it will not disclose the name till the appellate tribunal decides on the eligibility of Liberty House.
Normally the CoC does not recommend two bids to the NCLT for approval but the NCLAT has asked it to place two choices so that if one of the bids fails, the process does not get delayed and the other one gets the go-ahead. In short, the process of selecting the bidders and judging the eligibility will carry on concurrently. The NCLAT has fixed August 1 as the next date of hearing on the matter.
The bench also directed that the resolution professional (RP), after consulting the CoC, will invite operational creditors and all three resolution applicants will remain present on the date of consideration of the resolution plan. The suspended board of director will also be allowed to attend the meeting in which resolution plan will be considered by CoC.
Earlier, on July 17, the NCLAT had stayed the meeting of CoC when they were going to vote for finalisation of the highest bidder as the operational creditors complained that they were not allowed to be present in the meeting. The race for the bankrupt company had taken a turn on April 23 when the NCLT had asked its lenders led by Punjab National Bank to consider the late bid submitted by UK-based Liberty House.
Liberty House had, on February 26, challenged the rejection of its bid by the RP on the grounds that it had been submitted late. The two bidders who had submitted their bids within the deadline of February 8 were Tata Steel and JSW Steel.
On May 8, Tata Steel had challenged the NCLT’s order on the consideration of Liberty’s bid in the appellate tribunal.
Tata Steel had reportedly offered to make an upfront payment of Rs 17,000 crore to the lenders, way better than JSW Steel’s offer of an upfront payment of Rs 11,000 crore. According to sources, Liberty House has offered to pay bankers Rs 18,500 crore upfront, though this could not be confirmed.
Bhushan Power and Steel owed lenders close to Rs 47,000 crore as on March 31, 2017. Bhushan Power and Steel was among the 12 non-performing assets the Reserve Bank of India had referred for insolvency proceedings in June last year.