NCLT Asks Bhushan Power & Steel Creditors to Consider Liberty House Bid

New Delhi, Apr 23 (PTI) UK-based Liberty House is back in the race to acquire Bhushan Power & Steel Ltd (BPSL) with the National Company Law Tribunal (NCLT) today directing the Committee of Creditors (CoC) to consider its bid for the debt ridden firm.

Allowing the appeal of the Liberty House challenging its ouster from bid on ground of delay, the NCLT directed the resolution professional of BPSL to place its offer in the next meeting of the CoC, led by PNB, which had earlier in February rejected its bid without even opening the seal of its offer citing delay in submission.

"The RP shall place the unopened sealed cover apparently containing the resolution plan of the Liberty House before the next meeting of the CoC," said the principal bench of NCLT.

It further directed: "The resolution plan of the Liberty House shall not be rejected on the ground of delay emanating from process documents or any other documents internally circulated by the RP or the CoC. The rejection shall be on some substantive ground as against flimsy one."

NCLT bench headed by President Justice M M Kumar also observed that the BPSL's corporate insolvency resolution period would not be completed within the mandatory 270 days and hence excluded the period between February 22, when the petition was filed, till today, when the verdict came.

"The period spend in this litigation stands excluded. The whole process may now be concluded before June 23, 2018," the tribunal said.

Welcoming the order, a Liberty House Spokesperson said, "The judgement came out today. The NCLT has given the judgement in our favour saying that our bid should be considered for such a good asset. We are really grateful to the court..."

The tribunal's order came over a petition filed by Liberty House, challenging the rejection of its bid by the RP for Bhushan Power and Steel on account of late submission. Liberty House had moved the NCLT on February 26 against the rejection.

According to NCLT, in the new regime, consideration of a resolution plan of another competitor would advance the object of the code in maximisation of the assets of the corporate debtor and may provide better solutions in restructuring the stressed assets.

"The packet in sealed cover has been kept intact so that it may be seen by CoC and RP. The bench officer shall hand it over to RP or his counsel," it said.

BPSL's RP had received the proposal from Liberty House on February 20, 2018, which was after the expiry period prescribe in the process documents.

It was forwarded to CoC, which had returned the unopened bid contending that Liberty House submitted their bids after two bids -- Tata Steel and JSW Steel -- were under evaluation.

"The Liberty House fulfilled the eligibility criteria and the only argument raise was that it failed to submit a certificate from a chartered accountant with regards to its eligibility. However, such a trivial lacuna may not constitute the basis for rejecting the expression of interest shown by a prospective resolution applicant," said NCLT adding "moreover, there is no intimation given to Liberty House showing it lacked eligibility".

An official with JSW Steel refused to comment on the development but said the company at present is focusing on Essar Steel.

Tata Steel Spokesperson also declined to comment.

Bhushan Power and Steel Ltd owes about Rs 45,000 crore to its lender.

Meanwhile, Binani Industries, which is also contesting a case in NCLT and NCLAT over issue of maximisation of bid for its 98 per cent debt ridden subsidiary Binani Cement, said that today's order would lay down rules for RP and creditors.

"The judgements in the Bhushan case today, and Essar case on Friday lay down a strict circumference of authority for the IRP and the creditors. The judgements give the Binani Group hope that the creditors will take the path of value maximisation alone and not be swayed by externalities," said Binani Group Senior Advisor, Sameer Kaji.

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