Tatas’ bid for B hush an Steel gets NCLT nod
The National Company Law Tribunal (NCLT) on Tuesday approved Tata Steel’s bid of ~325 billion, along with 12.27 per cent equity to creditors, for the debtridden Bhushan Steel (BSL).
The tribunal accepted the plan filed by BSL’s resolution professional (RP), which was approved by the committee of creditors (CoC) led by SBI, after finding Tata Steel as the highest bidder.
“The application filed by the RP for accepting the resolution plan approved by the CoC submitted by resolution applicant Tata Steel is accepted,” said a two-member bench comprising the NCLT President Justice M M Kumar and S K Mohapatra.
The tribunal also gave approval for the appointment of a monitoring agency for the deal. The NCLT, in its 85-page order, also directed BSL’s ex management to cooperate with the monitoring agency during the implementation of the resolution plan and granted it liberty to approach it during the process.
“Liberty is granted to the monitoring agency to apply for any further direction against the ex-management, its directors or any other officers, if such necessity arrives,” said the NCLT.
BSL had a debt of ~560 billion from 53 financial creditors and ~28 billion from 751 operational creditors, which also include workmen, employee and statutory creditors. It had a liquidation value of ~145 billion. The CoC had selected Tata Steel, which had offered ~325 billion as upfront payment along with 12.27 per cent equity in BSL to the creditors.
However, this was challenged by some BSL employees contending that Tata Steel was not eligible under Section 29 (A) of the Insolvency and Bankruptcy Code (IBC), which was dismissed by the NCLT.
The tribunal said the plea “filed by Bhushan employees is also dismissed with cost of ~100,000 to be paid by Rahul Sengupta personally. The cost be deposited in the account of corporate debtor (BSL)”.
The resolution plan retrieves about 67 per cent of the NPAs or bad loans and takes care of the existing employees by continuing their employment and also provide for payment of their back wages, the tribunal observed.