Bhushan Power & Steel: Advantage Tatas
Tata Steel has an edge in the battle for Bhushan Power & Steel, after the committee of creditors on Monday sat through the presentation on resolution plans from three bidders — the Tatas, Liberty House and JSW Steel. Sources indicated that lenders might be in favour of Tata Steel’s resolution plan as there were some concerns regarding the funding plan of Liberty House.
Tata Steel is likely to have an edge in the battle for Bhushan Power & Steel after the Committee of Creditors (CoC) sat through presentations on resolution plans from all bidders on Monday.
All the three bidders — Tata Steel, Liberty House and JSW Steel — made presentations on their resolution plans. Lenders who met informally after the presentations were understood to be in favour of Tata Steel’s resolution plan, since there were some concerns regarding the funding plan of Liberty House, sources said. Tata Steel was the top contender right now, lenders said.
Tata Steel is said to have put in a bid of ~245 billion, including capital infusion of ~75 billion. Liberty House’s bid was ~10 billion higher than Tata Steel’s at ~180 billion. However, there were some questions about the source of funding, and the CoC is likely to have granted the company time to address the issue, according to sources.
“There has been no decision. The CoC is evaluating and queries are to be addressed on both sides. Also, no one will know about the winner, since the CoC will seal their decision and wait for the National Company Law Appellate Tribunal (NCLAT) hearing on July 12,” a Liberty House spokesperson said. Liberty House, however, didn't comment on the funding.
The next meeting of the Committee
of Creditors has been fixed for June 19. All three bidders will be tested for eligibility under Section 29A of the Insolvency and Bankruptcy Code (IBC).
Tata Steel has already bagged Bhushan Steel. Asked whether the firm would still be interested in Bhushan Power & Steel, a Tata Steel executive said, “We will take a call at the right time.” If Tata Steel does bag Bhushan Power & Steel, it would make the former the largest steelmaker in the domestic market. Bhushan Power & Steel has a capacity of 3 million tonnes and debt of ~470 billion. The NCLAT had asked the CoC to go ahead with the selection of bids and to keep its decision in a sealed cover. The decision will be subject to the NCLAT’s final order. The next hearing will be on July 12.
Bhushan Power & Steel was a twoway race initially. Tata Steel and JSW Steel had submitted their bids within the deadline. However, Liberty House made a late bid. The CoC had rejected Liberty House’s bid on grounds of late submission but finally the National Company Law Tribunal (NCLT) asked the committee to consider it. Tata Steel had challenged the NCLT order in the NCLAT, but no stay on the proceedings was granted.