The appellate bankruptcy court on Tuesday barred lenders from voting for the highest bidder for Bhushan Power, following a plea from Liberty House that a transparent process was not being followed by lenders. The National Company Law Appellate Tribunal will hear lenders’ response on the matter on Wednesday, but the stay on voting will be in force till July 20.
The ruling came just before the company’s committee of creditors was to vote for an offer made by Tata SteelNSE -1.28 % for the bankruptcy steelmaker. Liberty House and JSW SteelNSE -0.50 % were the other two entities that had submitted resolution plans for Bhushan Power.
Lenders see the ruling as a major setback and also a U-turn taken by the tribunal, particularly because last week it had directed lenders to go ahead with the resolution process despite objections being raised by UK-based Liberty House. The ‘to and fro’ from the adjudicating authority has disappointed several lenders who were looking at a quick resolution to recover their dues as they were seeing a sharp rise in their bad loans.
Lenders were to begin voting for Bhushan Power on Tuesday and conclude it by Wednesday evening.
