After a marathon meeting on Monday, lenders to Bhushan Power and Steel (BPSL) are likely to zero in on the most preferred bidder to take over the debt-laden firm next week.
After a marathon meeting on Monday, lenders to Bhushan Power and Steel (BPSL) are likely to zero in on the most preferred bidder to take over the debt-laden firm next week, sources said. The committee of creditors (CoC) assessed resolution plans submitted by Tata Steel and Liberty House for BPSL.
Persons familiar with the development said Tata Steel has offered to make an upfront payment of Rs 17,000 crore to lenders and bring in Rs 7,500 crore as working capital. Liberty House is understood to have offered to pay rs 18,500 crore to lenders and bring in Rs 7,350 crore.
The best bidder, sources said, would be picked after considering “whether the resolution applicant(s) have made any provision with regard to other creditors such as secured creditors, unsecured creditors, employees and government dues,” as directed by the appellate tribunal.
Apart from representatives of 35 lenders, both the parties were present in the meeting. “Lenders failed to reach to a consensus as both the bids had some merits and demerits. However, they unanimously rejected the idea of electronic voting to identify the preferred bidder though an e-voting might be considered,” persons present in the meeting, said.
The National Company Law Appellate Tribunal (NCLAT) had, on May 9, asked the lenders to approve “one or other resolution plan”, but not disclose the identity of the highest bidder till it decides on the petition. The NCLAT will now hear the matter on July 12. Liberty House had placed its bid for BPSL on February 20, well past the deadline of February 8. The resolution professional Mahender Khandelwal had rejected it on the grounds it been submitted after the deadline. However, on a petition filed by Liberty House, the National Company Law Tribunal (NCLT) had on April 23 directed the lenders of BPSL, led by Punjab National Bank, to consider the late bid submitted by Liberty House.
Tata Steel, which had emerged as the highest bidder for Bhushan Power had challenged the NCLT’s order to allow LIberty House’s bid to be considered. On May 9, however, the appellate tribunal had asked lenders to consider the bid by Liberty House.