Lenders to Bhushan Power and Steel (BPSL) have rejected the proposal for a second round of bidding for the troubled steel-maker, a development that could well cheer UK-based Liberty House, which has submitted the highest bid for the beleaguered firm, though after the designated deadline.
Lenders to Bhushan Power and Steel (BPSL) have rejected the proposal for a second round of bidding for the troubled steel-maker, a development that could well cheer UK-based Liberty House, which has submitted the highest bid for the beleaguered firm, though after the designated deadline. The other contenders — Tata Steel and JSW Steel — had submitted their bids within the February 8 deadline, but their bids were lower.
The rejection of a second round of bids means that the lenders would need to agree on the proposal to accept from bidders in the first round and proceed with the resolution process. Sources close to the development said that BPSL’s lenders, led by state-run Punjab National Bank did not find merit in the rebidding proposal, initiated by BPSL’s resolution professional (RP) Mahender Khandelwal. The reason for the RP to propose rebidding to the lenders was not immediately known, though this could have been with the intent of offering other bidders an opportunity to revise their bids.
For an RP to move ahead with any such proposal, at least 75% of the lenders must give their nod. In this case, sources said, the count fell short of the requisite number in the e-voting process. Bhushan Power and Steel owed lenders about Rs 47,000 crore as on March 31, 2017. Sources said while Tata Steel had offered to make an upfront payment of Rs 17,000 crore to the lenders, Liberty House has offered to pay Rs 18,500 crore. JSW Steel’s offer for upfront payment was Rs 11,000 crore.
Last week, the National Company Law Tribunal (NCLT) had asked the Committee of Creditors (CoC) of the troubled firm to consider the late bid submitted by UK-based Liberty House for the floundering steel-maker. The direction followed Liberty House’s challenge of the rejection of its bid by the RP on the grounds that it was submitted late.
A two-member NCLT bench, headed by justice M M Kumar, in its order had said that the bid by Liberty House could not be disqualified only on the grounds it had been submitted after the deadline. “The resolution plan of the Liberty House shall not be rejected on the ground of delay emanating from process document or any other document internally circulated by the RP or the CoC. The rejection shall be on some substantive ground as against flimsy one,” the bench had said.
The tribunal has now directed the CoC to complete its resolution proceedings by June 23. Bhushan Power and Steel Ltd was among the 12 non-performing assets referred for insolvency proceedings by Reserve Bank of India in June last year.