Tata Steel on Monday alleged that it was wrong on the part of the National Company Law Tribunal (NCLT) to allow the late bid submitted by Liberty House for Bhushan Power and Steel (BPSL). The UK-based firm, it said, was time and again making a mockery with the timelines set for the resolution process of the debt-ridden firm.
Senior advocate Abhishek Manu Singhvi, appearing on behalf of Tata Steel, said the UK-based firm had failed to file requisite documents to show its eligibility despite the resolution professional (RP) giving it five opportunities since the time of submission of expression of interest (EoI).
On May 3, Tata Steel moved a plea in the National Company Law Appellate Tribunal (NCLAT) challenging NCLT’s April 23 order that had directed the committee of creditors (CoC) and the RP to consider Liberty House’s late bid.
“Liberty House played the role of a spoiler. It was sent five reminders, but it did not respond. By allowing its late bid to consider, the adjudicating authority gave a premium to such conducts,” Singhvi said.
Against the original deadline of February 8, Liberty House had submitted its bid on February 20. Tata Steel and JSW Steel were the two bidders who had submitted bids within the deadline.
Singhvi said Liberty House’s bid was rejected by the RP and the CoC due to non-compliance with the EoI and belated submission of the resolution plan. The rejection was also communicated to Liberty House by the RP on February 21. Liberty House had on February 26 challenged the rejection in the NCLAT.
The outcome of the Tatas plea in the NCLAT is important for BPSL’s resolution. On May 9, the appellate tribunal had directed, “the CoC may consider the resolution plan submitted by all the resolution applicants which will be subject to the decision of this appeal”.
“While considering so, they should give reason for rejecting one or the other resolution plan and also record the suggestions, if any, given by the board of directors or the operational creditor or their representative,” it had said.
Meanwhile, on August 13, Sajjan Jindal-led JSW Steel reportedly outbid Tata Steel and Liberty House in the race for taking over BPSL, offering to pay `19,350 crore to the financial creditors of the debt-ridden company. Apart from this, the company has offered to pay `350 crore to the operational creditors against their admitted claim of `700 crore.
JSW Steel’s `19,350-crore offer would mean the lenders of the company, which owed `47,000 crore to a clutch of lenders led by Punjab National Bank, will have to take a 59% haircut for their exposure to the company.
BPSL’s 3.1 million tonne per annum steel making capacity will catapult JSW Steel as India’s largest steel company, outpacing Tata Steel, with a capacity of over 22 million tonne per annum (MTPA). JSW Steel has already taken over another insolvent firm Monnet Ispat through the IBC route. Monnet has 1.1 MTPA steel-making capacity.