The NCLAT (National Company Law Appellate Tribunal) has asked the CoC (Committee of Creditors) of BPSL (Bhushan Power and Steel Ltd) to consider the bid of UK’s Liberty House for the Bhushan Power which is currently undergoing the bankruptcy proceedings. Liberty House was a late entrant in the bidding process of BPSL and had submitted its bid post the deadline of 8 Feb’18.
The CoC of the company had rejected the Liberty House bid in February leaving Tata Steel and JSW Steel in the race for taking over the assets of the bankrupt firm. Tata Steel had outbid JSW Steel in the last lag and had emerged as the highest bidder for BPSL by offering to pay INR 170 billion to financial creditors against INR 110 billion that was offered by JSW Steel.
However, Liberty House challenged this decision of CoC before NCLT (National Company Law Tribunal) claiming that hat RP (Resolution Professional) had rejected its bid to acquire BPSL without even opening the seal of its offer.
NCLT subsequently gave the decision in favour of Liberty House and ordered BPSL’s lenders to consider its bid in an order passed on 23 Apr’18.
This NCLT’s decision in favour of Liberty House irked Tata Steel (which emerged as the highest bidder for BPSL) which then challenged this order of NCLT to NCLAT.
Much to Tata Steel’s disappointment, NCLAT also gave decision in favour of Liberty House claiming that its bid cannot be disqualified only on the ground of being submitted after the deadline of the resolution professional (RP).
This decision of NCLAT’s is clearly unfavourable for Tata Steel as according to the market reports Liberty House has offered INR 1,500 crore more to BPSL’s lenders, over Tata Steel’s offer of INR.17,000 crore. Now will Tata Steel lose its battle for BPSL against Liberty House remains to be seen.
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.
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