Lifting its earlier stay order, the National Company Law Appellate Tribunal (NCLAT) on Thursday allowed lenders to Bhushan Power and Steel (BPSL) to go ahead with the resolution process for the bankrupt firm and approve an appropriate resolution plan, and place it before the adjudicating authority (NCLT) to seek its go-ahead. Tata Steel, Liberty House and JSW Steel are in the fray to take over BPSL. Sources said that while Tata Steel’s bid was a little lower than that of the UK-based Liberty House, it was higher than JSW Steel’s. The committee of creditors (CoC) has earlier zeroed in on Tata Steel as the preferred bidder because its bid was more acceptable on other parameters than those of the other two.
Liberty House was a late bidder in BPSL. Tata Steel, which had emerged as the highest bidder before Liberty’s entry, had challenged the NCLT’s April 23 order that asked the lenders to consider the late bid submitted by the UK-based firm. In its May 9 order, the appellate tribunal also ordered that Liberty House’s bid should be accepted, but asked lenders not to disclose the identity of the highest bidder till it decides on the petition.
In its May 24 order, the NCLAT had again ordered that though the CoC might approve a resolution plan, with the prior permission of the appellate tribunal, it would not place it before the adjudicating authority (NCLT) and keep it in a sealed cover, till the pendency of the matter. Hearing the matter on Thursday, the two-member bench of the appellate tribunal, headed by chairman Justice SJ Mukhopadhaya, however, said, “All the earlier orders stand modified.”
This paved the way for the CoC to proceed with the resolution process and place it before the NCLT for its approval. The NCLAT has placed the matter for further hearing on July 26. Liberty House had come into the fray for BPSL only on February 20, well past the deadline of February 8. Tata Steel and JSW Steel were the only other bidders which had submitted a bid before the deadline ended on February 8. BPSL’s resolution professional Mahender Khandelwal had rejected Liberty House’s bid on the ground that it been submitted after the deadline.
Liberty House had then challenged the RP’s decision in the NCLT, which had observed that its bid could not be disqualified only on the grounds that it was submitted after the deadline. 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 `18,500 crore upfront, though this could not be confirmed. Bhushan Power and Steel figured among the 12 large non-performing assets referred for insolvency proceedings by banks following a nudge from the Reserve Bank of India in June last year. The company owes lenders over `47,000 crore as on March 31, 2017.