In a recent twist of events in an auction case of Bhushan Power & Steel Ltd (BPSL), the CoC (Committee of Creditors) has asked for submission of fresh bids from all the three bidders in the case i.e. Tata Steel, JSW Steel and Liberty House by 31 July 2018.
This decision from CoC is unfavourable for Tata Steel as on 11 Jul’18 BPSL’s lenders have decided to go ahead with handing over the firm to Tata Steel which won the bid in bankruptcy court.
However, as a next step when on 17 Jul’18, CoC was going to vote for finalisation of the highest bidder (Tata Steel) for BPSL, the NCLAT (National Company Law Appellate Tribunal) had stayed the meeting of CoC as BPSL’s operational creditors had alleged that the resolution professional hadn’t allowed their representative to attend the lenders meeting. There are as many as 1,700 operational creditors of Bhushan Power & Steel who are asking for their dues to be cleared.
Now, after the CoC’s call for resubmission of bids from all the three bidders, market reports suggest that this time JSW Steel’s offer is likely to be highest amongst the bids made by all three bidders. While Tata Steel had offered INR 17,000 crore, Liberty House’s offer was INR 18,500 crore whereas JSW Steel’s offer is anticipated to be more than INR 18,500 crore this time. All the three companies have promised to invest INR 7,000 crore in the operations of Bhushan Power & Steel.
Earlier, BPSL’s lenders had rejected the resolution plan submitted by Liberty House citing delay in submission of bid whereas JSW Steel’s bid of INR 11,000 crore was much lower than what Tata Steel had offered, making latter the highest bidder of BPSL.
BPSL featured among the 12 accounts recommended by RBI’s (Reserve Bank of India) internal advisory committee for resolution under the Insolvency and Bankruptcy Code (IBC) in June last year. The company’s debt stood at INR 372 billion in 2015-16. Net sales were at INR 77 billion and losses at INR 24.36 billion. And the dues have now risen to INR 470 billion.
Leave a Reply