UK-based Liberty House has pipped Tata Steel to emerge the highest bidder for Bhushan Power.
The Committee of Creditors on Friday considered the Liberty House bid after a direction from the National Company Law Tribunal (NCLT), even though the offer came in after the deadline expired.
Liberty House, owned by Indian-born steel tycoon Sanjeev Gupta, had submitted a resolution plan for Bhushan Power on February 20, whereas the last day for submission of bids was February 8. When the Resolution Professional declined to open the bid, Liberty House approached NCLT.
Last week, the NCLT Bench, headed by Justice MM Kumar, had ruled that bids could be rejected only on substantive grounds and not over a delay in the submission of a bid. The tribunal also extended the deadline for finalising the resolution plan by two months to June 23.
“We have been told that our bids are superior than that of Tata Steel both on operational and financial grounds. Now, the CoC has to approve and submit the proposal to NCLT for a final nod,” said sources close to Liberty House.
Banking sources said Liberty House’s offer to pay ₹18,500 crore upfront tilted the scale in its favour against Tata Steel, which had agreed to shell out ₹17,000 crore.
Tatas to move NCLAT
Until now, Tata Steel was considered the highest bidder for Bhushan Power, outbidding JSW Steel by a wide margin. Overall, Tata Steel’s bid was upward of ₹24,000 crore while that of JSW Steel was about ₹13,000 crore. Liberty House’s bid is expected to be much higher than that of the Tatas, sources said.
It is learnt that Tata Steel will soon move the National Company Law Appellate Tribunal (NCLAT) against the NCLT ruling to consider the Liberty House bid.
Bhushan Power has an outstanding loan amount of ₹47,301 crore. It owes another ₹706.88 crore to operational creditors and ₹82.73 crore to workmen. All creditors will have to take a substantial haircut once the final winning bid is selected.
Incidentally, Tata Steel has already emerged the winner to acquire Bhushan Steel, the other firm promoted by the Singal family. The Tata company is awaiting final approval from NCLT on the matter. However, L&T, one of the operational creditors, has filed a case in NCLT to declare it a secured creditor in the Bhushan Steel insolvency process. Bhushan Steel owes over ₹900 crore to L&T.