NCLT puts Bhushan Power & Steel’s insolvency resolution process on hold

Industry:    2018-03-14

The Delhi bench of NCLT on Tuesday has said that lenders cannot hold any meeting to decide on the resolution plan for Bhushan Power and Steel till the court delivers a final verdict in a matter where UK’s Liberty House has requested for its late bid for the company to be considered.

Following this, the creditors’ meeting that was supposed to be held on Wednesday has been cancelled until a final order for the case comes about. Another hearing is scheduled to take place on Wednesday.

Easing the pressure on the deadline for the resolution to take place, justice MM Kumar also said that the number of days spent on legislation will not be counted as part of the corporate insolvency resolution process (CIRP) and will be deducted from the 270-days that the resolution professional gets to decide on the fate of a stressed asset.

“The matter is subjudice and we cannot comment on this,” said a spokesperson of Liberty House.Lenders were represented by Ramji Srinivasan while the RP was represented by Arun Kathpalia.

The judge has said that until it listens to all sides of the matter, it cannot pass an order. Tata Steel, which has emerged as the highest bidder for the asset, defeating JSW Steel by a significant margin, is scheduled to plead its case on Thursday. Tata Steel was also supposed to revert to the lenders regarding its revised offer conditions in the meeting on Wednesday. It has offered Rs 24,500 crore for the asset upon a condition that the lenders buy the entire equity of the two subsidiaries of Bhushan Power and Steel , namely Nova Iron & Steel and Ambey Steel & Power. However, lenders are not comfortable with the condition and had asked the steel company to revisit its terms.
Liberty House which had submitted a bid after the February 8 deadline had argued last week that the creditors had rejected the bid without even opening it and that the bid should at least be opened to be considered.
Bhushan Power and Steel owes close to Rs 48,000 crore to banks and was referred to the National Company Law Tribunal by Punjab National Bank in June last year. Its resolution professional is Mahender Khandelwal.
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