Lenders to Bhushan Power and Steel (BPSL) have urged the National Company Law Appellate Tribunal (NCLAT) to direct the bankrupt firm’s highest bidder JSW Steel to implement the corporate insolvency resolution plan (CIRP) without further delay. JSW Steel has offered to pay Rs 19,350 crore to financial creditors and Rs 350 crore to operational creditors in its bid that was approved by the National Company Law Tribunal (NCLT) on September 5.
Banks and financial institutions also want JSW Steel to pay a minimum 8.25% interest on their Rs 19,350 crore due from October 4 — one month from the date JSW Steel’s plan was approved — till the plan is implemented. They have also claimed their share of the profits earned by BPSL during the CIRP period that started on July 26, 2017.
However, being sympathetic to JSW Steel, lenders have urged the appellate tribunal to listen to Sajjan Jindal-led firm’s prayer of providing protection against attachment or confiscation of assets of BPSL under Prevention of Money Laundering Act (PMLA).
“The CoC submits that it fully supports the grant of protective orders sought by JSW Steel against attachment of assets of BPSL under PMLA. It is submitted that such a protective order would be corollary of the IBC process, by which genuine third party resolution applicants under the order of a tribunal, acquire and re-organise insolvent companies for continuation as financially solvent going concerns,” lenders have written to the NCLAT replying to its notice on an appeal by JSW Steel.
JSW Steel, on September 13, filed an application with the NCLAT seeking protection of the insolvent firm’s assets, post-takeover. While approving its bid, the NCLT did not grant it protection from attachment of assets on account of acts of omission or commission of the previous directors under the PMLA.
JSW Steel wanted that the assets should not be attached by the investigating agencies. It also wanted that the profits earned by BPSL during the corporate insolvency resolution process (CIRP) should not be distributed to the lenders. JSW Steel was apprehensive as agencies are in the midst of investigating on alleged siphoning of thousands of crores of funds borrowed from banks on behalf of BPSL.
The NCLAT had on September 16 had issued notices to lenders. The next hearing is scheduled on October 14. The appellate tribunal declined to pass any order on JSW Steel’s application to stay the implementation of the resolution plan for BPSL.