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Tata Steel and Liberty House, the incumbent lead bidders for the stressed Bhushan Power and Steel, will have to revise their bids upwards to stay in contention with the third-placed contender JSW Steel, which sprung a surprise by increasing its bid to ₹19,000 crore from ₹8,000 crore at the Committee of Creditors meeting on Friday.
The CoC has fixed July 31 as the last date for Tata Steel and Liberty House to revise their bids higher or ease out after JSW Steel increased its bid by ₹8,000 crore to ₹19,000 crore, said sources. The Tata group had offered ₹17,000 crore while JSW Steel had placed a bid of ₹11,000 crore on February 12, the last day for submission of bids.
However, UK-based Indian business man Sanjeev Gupta-owned Liberty House offered to pay ₹18,500 crore up front 12 days after the deadline offered, surpassing Tata Steel.
Liberty House, whose bid was not considered by the CoC, moved the National Company Law Appellate Tribunal.
On July 20, NCLAT directed the CoC to consider all three bids — Tata Steel, Liberty House and JSW Steel — and submit the list of both the highest and second highest bidder so that the adjudicating authority could approve one in case of any problems with the first resolution plan in future.
The next hearing in the case is posted for August 1.
Bhushan Power & Steel, which has defaulted on ₹49,264 crore, is among the top 12 defaulters referred for insolvency proceeding by banking regulator RBI.
The conservative JSW Steel has entered into a bidding war in the insolvency proceeding for the first time, having lost the race to buy Bhushan Steel to Tata Steel. However, JSW Steel has bagged Monnet Ispat and has thrown its hat in the ring for Essar Steel.
Meanwhile, the Supreme Court earlier this month directed NCLAT not to approve any resolution plan for Bhushan Power till it takes a call on the bidders’ eligibility norms.
Hearing a petition filed by Sanjay Singal, Chairman and Managing Director, Bhushan Power, the apex court clubbed a clutch of cases of a similar nature, including a petition by operational creditors to Binani Cement disputing the code’s constitutional validity, for joint hearing next month. Singal has challenged various Sections of the code including Section 29A, which disqualifies defaulting promoters from bidding for their own companies, as being ultra vires of a few articles of the Constitution.
If allowed to bid, they would come out with better bids than those submitted so far, he said.
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