After the Committee of creditors (CoC) of Bhushan Power and Steel rejected Liberty House’s bid as it was submitted after the February 8 deadline, the UK-based firm on Monday moved the National Company Law Tribunal (NCLT) seeking redress. Arguing its case before the NCLT, the Liberty House’s counsel said the resolution professional (RP) or the CoC should consider its resolution plan and not return it as unopened since “the more they get, the better (it is) for the financial creditors”. In September last year, Mahender Kumar Khandelwal had sought resolution plans from potential applicants after being appointed by the NCLT as Bhushan Power & Steel’s RP. The company owes lenders over Rs 47,000 crore, as on March 31, 2017.
However, the counsel representing the RP countered Liberty House’s argument saying that despite repeated reminders by the RP, Liberty House did not submit all documents required to make it eligible for bidding. “It did not even submit the certificate from the chartered accountant with regard to its networth,” the counsel said. “It is a mala fide move by Liberty House,” the RP’s counsel said.
On February 20, a day before the CoC opened the bids, Liberty House had put in its bid and the legal team advising the RP was therefore against the opening of the bid document. Meanwhile, only Tata Steel and JSW Steel had submitted their bids within the stipulated deadline. Sources said while Tata Steel has offered rs 17,000 crore to lenders as repayment and Rs 7,200 crore for operations of Bhushan Power, JSW has made an offer of Rs 11,000 crore as repayment to lenders and Rs 2,000 crore for the operations of the firm. Appearing on behalf of Tata Steel, Abhishek Manu Singhvi said by submitting the bid well after the deadline and then, moving to NCLT, Liberty House is actually acting as a ‘spolier’ in the entire resolution process and thus its plea should not be entertained. “While I am a serious bidder, you (Liberty House) are a spoiler,” he said. The bench, however, directed RP, CoC and Tata Steel to file replies on Liberty House’s plea and listed the case for further hearing on March 6. According to information received by FE, the fair value of the company has been pegged at close to Rs 25,000 crore and its liquidation value is estimated to be in the range of Rs 10,000-12,000 crore.
As on January 31, thirty three financial creditors have claimed Rs 47,302 crore from the company and the RP has so far admitted claims worth Rs 47,265 crore. The fair value of a company is arrived at by adjusting for the value of immovable property, jewellery and art from the book value. The liquidation value is the aggregate worth of a company’s physical assets if liquidated.