Comments
Liberty House, one of the contenders for acquiring Bhushan Power and Steel, plans to move the National Company Law Tribunal (NCLT) after the Committee of Creditors refused to open its financial bid placed for acquiring the stressed asset.
The company had submitted its bid to the Resolution Professional after the deadline expired on February 8.
Tata Steel has emerged as the highest bidder for Sanjay Singhal-owned Bhushan Power and Steel with an offer to pay ₹17,000 crore to lenders and additional cash infusion of ₹7,000 crore for working capital and payments to operational creditors and employees.
Claiming that its bid was submitted before other bids were opened, Liberty House spokesperson said the creditors wanted to open the bid as they know it is higher, but lawyers stopped them.
“We will go to the NCLT and ask them to direct RP and CoC to open our bid. We are hopeful that NCLT would clarify and the bid would be opened,” she said.
Asked whether their bid will be higher than that of Tata Steel, she said: “our bid is superior in every way, why would the creditors reject a higher offer?”
Nowhere in the world there is a bizarre system where creditors can deny recovery of more money on bad debts. It would not be fair as this is public money, she added.
Promoted by Indian business man Sanjeev Gupta, Liberty House has specialised in taking over stressed assets and turning them around. Incidentally, it bought over Tata Steel pipe mill in the UK and is in the process of making it profitable.
“India needs more competition and it should encourage entrepreneurs like us to invest. If we are successful on our bids we will invest $10 billion in India over the next five years,” she said. Suggesting that the RP should negotiate with all bidders for better outcome, Liberty House said its roots are in India and the BPSL asset put on the block are among the best in the world for auto steel.
Apart from Tata Steel, the other bidder of Bhushan Steel include JSW Steel which has proposed to pay ₹11,000 crore upfront, issuance of equity to lenders and a cash infusion of ₹2,000 crore as working capital.
Tata Steel has not offered any equity in the company to lenders and issue fresh equity to itself.
Bhushan Power & Steel, which owes lenders ₹48,000 crore, has been put on the block by Punjab National Bank.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.