As the insolvency petitions against Bhushan steel and Bhushan Power & Steel have been admitted by the National Company Law Tribunal (NCLT), the two firms will now be virtually run by Interim Resolution Professionals (IRP).
State Bank of India had moved the insolvency petition against Bhushan steel while Punjab National bank moved the petition against Bhushan Power and Steel. Vijaykumar V Iyer has been appointed as the IRP for Bhushan Steel and Mahender Kumar Khandelwal as the IRP for Bhushan Power and Steel.
According to the section 7 of the Insolvency and Bankruptcy Code (IBC), the powers of the Board of Directors of the two firms shall stand suspended and the management of the affairs of the company will be vested with the IRPs.
Professionals, officers and managers of the two companies will report to the IRPs. The IRP will constitute the committee of the creditors (CoC) within two weeks from the NCLT’s final order and will run the company in association with the CoC.
Along with the CoC, the IRP will now come up with a resolution plan. If the committee is unable to find a solution within 180 days — this can be extended to 270 days — the company will be liquidated.
Bhushan Steel had objected to the insolvency proceedings alleging that SBI inflated dues by around Rs 100 crore, but Bhushan Power and Steel did not show any such reservations. While Bhushan steel owes bank worth over Rs 44,000 crore, Bhushan Power and Steel is indebted by over Rs 37,000 crore.
Bhushan Steel and Bhushan Power and steel are among the 12 stressed assets identified by the Reserve Bank in which banks have an exposure of more than Rs 5,000 crore and more than 60% of which has been recognised as NPAs.
The RBI, had on June 13, had asked banks to refer these dozen troubled companies with a combined debt of close to Rs 2.4 lakh crore to the NCLT.
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