The insolvency process for Bhushan Power and Steel (BPSL) is interestingly poised with the Supreme Court now set to hear Tata Steel’s appeal on August 10. This is ahead of the August 13 deadline set by the National Company Law Appellate Tribunal (NCLAT) for filing revised and unconditional bids. Three companies are interested in acquiring BPSL: Tata Steel, Liberty House and JSW Steel.
To that extent, Monday’s decision by the NCLAT granting the bidders a one-week extension for revised bid is a relief for Tata Steel; the company had appealed in the Supreme Court on August 3 against the NCLAT’s August 1 order that allowed the bidders to submit revised bids for the company by August 6.
It had also asked for an early hearing, but the apex court had declined the request.
BPSL owed lenders around Rs 47,000 crore as on March 31, 2017. Tata Steel is understood to have offered to make an upfront payment of Rs 16,500 crore to the lenders, a better proposal than JSW Steel’s offer of an upfront payment of Rs 11,000 crore. Sources said Liberty House has offered to pay bankers Rs 18,500 crore upfront.
BPSL’s corporate insolvency resolution process has gone through several twists and turns in the last few months, starting with the late submission of bid by the US-based Liberty House. Against the original deadline of February 8, Liberty House had submitted its bid on February 20. Tata Steel and JSW Steel had submitted their bids within the February 8 deadline. While the resolution professional (RP) evaluated the bids of Tata Steel and JSW Steel, it left the Liberty House bid unopened.
Liberty House had on February 26 challenged the rejection of its bid by the RP in the NCLT, which on April 23 directed the lenders led by Punjab National Bank to consider Liberty House’s bid. On May 8, Tata Steel had challenged NCLT’s order on the consideration of Liberty’s bid in the appellate tribunal.
On July 20, the NCLAT had directed the committee of creditors (CoC) to convene its meeting and consider all the three bids and decide the H1 and H2 bidders and submit the proposal to the NCLT for adjudication, but with a rider that the NCLT will not disclose the preferred choices till it decides on the eligibility of Liberty House.
When the CoC met on July 27 as part of this direction, JSW Steel expressed its desire to revise its bid. The CoC allowed it, which was objected to by Tata Steel, which moved the NCLAT. Meanwhile, at the CoC’s meeting on July 31, the lenders chose Tata Steel’s bid as the preferred one. However, with the NCLAT’s August 1 order calling for fresh bids, the CoC’s decision got superseded.
The NCLAT’s August 1 order had said that the CoC will consider and evaluate the revised bids and identify the highest bidder, but put it in a sealed cover until the appellate tribunal passes an order on the original petition of Tata Steel which is whether the late submission of bid by Liberty House initially should be seen valid or not.
