UK’s Liberty House have turned favourites to acquire bankrupt Bhushan Power and Steel after creditors to the company rejected a proposal to initiate rebidding for the steel major. Liberty House, a later bidder for the company, trumped an offer by Tata SteelNSE -0.93 % by Rs. 1500 crores, ET reported on 28 April.
Liberty House’s bid was opened at a meeting of the committee of creditors on Saturday under instructions from the national company law tribunal. It’s offer to make an upfront payment of Rs 18,500 crore to lenders of Bhushan Power trumped an offer by Tata that had committed an upfront payment of Rs. 17,000 crore for the company.
The lenders voted electronically on a proposal initiated by the resolution professional of Bhushan Power to seek their consent for rebidding for the company, to give the Tata’s a chance to revise their offer, as well as JSW, the only other contender that had submitted a binding bid for the company.
The requisite votes to pass the resolution were not received.
Liberty House had also offered to honor bank guarantees obtained by the steelmaker for certain financial commitments to counterparties as well as a working capital infusion into the company, the quantum of which ET could not immediately ascertain.
Tata Steel had offered a working capital infusion of Rs 7,500 crore in the company and pay-outs to employees and operational creditors.
A Tata Steel spokesperson told ET on 18 January in response to queries pertaining to its interest in acquiring Bhushan Power and Steel, “As a process, we do assess and evaluate various strategic opportunities for growth. This is an ongoing process in the company”.
A spokesperson for Liberty House said, “We have been informed today that the bids cannot be revised and the CoC will evaluate the existing offers”.
Liberty House’s bid was initially rejected by the committee of creditors led by State Bank of India because it was submitted past the February 8 deadline for submission of binding offers for the company.
Tata Steel had emerged the highest bidder at the time trumping a bid by JSW steel, the only other contender to have submitted a binding offer for the company, ET first reported in its edition dated 19 February.
Liberty House, an outlier that didn’t participate in the process after submitting an initial expression of interest, later submitted a surprise bid on 20 th February, well past the deadline for submission of final offers.
Its bid was initially rejected by the creditors after which the company approached the National Company Law Tribunal to appeal against the decision. The tribunal passed an order in its favour last Monday, directing the resolution professional of the company to open the bid.
Source: Economic Times