Insolvency: Liberty House offers over Rs 260 bn for Bhushan Power

UK-based Liberty House has offered over Rs 260 billion for acquiring the stressed assets of Bhushan Power & Steel, leading Tata Steel and JSW in the race.
The NCLT has asked Bhushan Power lenders, led by PNB, to consider the bid submitted by Liberty House for the debt-ridden company. It owes about Rs 450 billion to the lenders. “In the meeting of CoC held on Friday, the bid of Liberty House was opened. The consolidated bid amount offered by the firm for the stressed assets of Bhushan Power was over Rs 260 billion,” said a source privy to the development. Tata Steel had earlier offered Rs 170 billion to the lenders as upfront amount and Rs 72 billon for operations of Bhushan Power. JSW Steel made an offer of Rs 110 billion to the lenders and Rs 20 billion for the operations of the beleaguered power firm. The CoC will meet again next week and take a call on the rebidding.
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Allowing the plea of Liberty House, NCLT had earlier directed the CoC to complete its resolution proceedings by June 23. The tribunal’s order came over a petition filed by Liberty House, challenging the rejection of its bid by the Bhushan Power’s RP on account of late submission. Liberty House had moved the NCLT on February 26 against the rejection. The CoC had in February rejected Liberty House’s bid to acquire BPSL, leaving Tata Steel and JSW Steel in the race.
Liberty House had submitted before the NCLT that RP rejected its bid without even opening the seal of its offer.

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Bhushan Steel and Power was among the 12 non-performing accounts referred by the Reserve Bank for NCLT proceedings. The insolvency process was filed by the SBI in the case of Bhushan Steel.

Liberty House to approach NCLT on Bhushan Power bid rejection by creditors

The Sanjeev Gupta-led Liberty House will file a petition with the National Company Law Tribunal (NCLT) on Monday against the rejection of its bid to acquire debt-ridden Bhushan Power & Steel, which owes about Rs 450 billion to its lenders.
“We submitted the resolution plan 45 days before the completion of the 270-day deadline. So, the bid should have been accepted,” sources at Liberty House said.
“The petition is most likely to be heard on Monday itself,” a source said.
Parliament had passed the insolvency law in 2016 to hold corporate defaulters accountable and assist banks in recovering their dues.
Once cases are admitted by the NCLT, lenders to the companies are required to set up a committee for insolvency resolution within 180 days, which can be extended to 270 days after which the borrowing entity will be liquidated.
A source said when Liberty House had sent its resolution plan earlier this month, the bids submitted were not officially opened for Bhushan Power, hence the late submission.
UK-based Liberty House has shown interest in companies undergoing insolvency resolution in order to have a stronger presence in India. The company had submitted a revised bid for Amtek Auto on February 9.
Liberty House, worth $6.8 billion, has had its eyes set on the difficult but promising Indian market for quite some time now.
For Bhushan Power, Tata Steel is the strongest competitor to Liberty House. Tata Steel has bid aggressively for the asset.
The Committee of Creditors rejected Liberty House’s resolution plan on the grounds that the bid was submitted after the deadline.
“Our bid is higher and better. Should not this process be carried out in the best interests of the public and have optimum recovery rather than sticking to timelines and procedures,” a source said.