NCLAT UPHOLDS CoC DECISION ON BHUSHAN POWER
The National Company Law Appellate Tribunal (NCLAT) on Monday upheld the committee of creditors’ (CoC) decision to approve JSW Steel’s resolution plan for Bhushan Power and Steel and said the CoC was well within its rights to negotiate better terms with the resolution applicants. The appellate tribunal has remitted the matter back to principal Bench of the National Company Law Tribunal (NCLT), Delhi, and asked the Resolution Professional (RP) of Bhushan Power to place JSW Steel’s bid before it for approval.
“The adjudicating authority (NCLT) at the time of consideration of the approved resolution plan of JSW Steel will only ensure that all the stakeholders, particularly the operational creditors are treated similarly. It should ensure that no discrimination is being made between the financial creditors or the operational creditors,” the NCLAT said in its judgment. In case the NCLT felt that the operational creditors were being discriminated against, JSW Steel should be given a chance to improve its bid and resubmit the plan, the NCLAT said.
The NCLAT’s judgment comes in view of a plea moved by Tata Steel opposing NCLT’s decision asking the CoC to consider the resolution plan submitted by Liberty House. NCLT Delhi had on April 23 asked the CoC to also consider Liberty House’s resolution plan for Bhushan Power and Steel, keeping in view the goal of maximisation of the assets.
Tata Steel was opposed to Liberty House’ submitting a bid for Bhushan Power. It claimed the latter had failed to participate or provide necessary documents within time and hence should not be permitted to submit a plan.
It had also accused the Bhushan Steel CoC of being biased towards JSW Steels they had allowed the latter to revise its resolution plan six times. “Prior to approval by the adjudicating authority, merely because it is CoC, it cannot have changes after changes. I am making a direct charge,” the lawyer appearing for Tata Steel had then told the NCLAT.
JSW Steel had revised its offer from ~11,000 crore to ~18,000 crore and later to ~19,600 crore, whereas Tata Steel’s latest offer still stood at ~17,000 crore after it had refused to revised its bid. Bhushan Power is one of the companies among the 12 large non-performing accounts which the Reserve Bank of India had asked the banks to take to NCLT for debt resolution.
The company owes around ~45,000 crore to its lenders. Tata Steel, JSW Steel, and Liberty House were the three companies bidding for Bhushan Power and Steel as the company is undergoing corporate insolvency resolution under the Insolvency and Bankruptcy Code.