Liberty House to approach NCLT on Bhushan Power bid rejection by creditors

Bhushan Power and Steel owes about Rs 450 bn to its lenders

The Sanjeev Gupta-led Liberty House will file a petition with the National Company Law Tribunal (NCLT) on Monday against the rejection of its bid to acquire debt-ridden Bhushan Power & Steel, which owes about Rs 450 billion to its lenders.

“We submitted the resolution plan 45 days before the completion of the 270-day deadline. So, the bid should have been accepted,” sources at Liberty House said.

“The petition is most likely to be heard on Monday itself,” a source said.

Parliament had passed the insolvency law in 2016 to hold corporate defaulters accountable and assist banks in recovering their dues. Once cases are admitted by the NCLT, lenders to the companies are required to set up a committee for insolvency resolution within 180 days, which can be extended to 270 days after which the borrowing entity will be liquidated.

A source said when Liberty House had sent its resolution plan earlier this month, the bids submitted were not officially opened for Bhushan Power, hence the late submission.

UK-based Liberty House has shown interest in companies undergoing insolvency resolution in order to have a stronger presence in India. The company had submitted a revised bid for Amtek Auto on February 9.

Liberty House, worth $6.8 billion, has had its eyes set on the difficult but promising Indian market for quite some time now.

For Bhushan Power, Tata Steel is the strongest competitor to Liberty House. Tata Steel has bid aggressively for the asset.

The Committee of Creditors rejected Liberty House’s resolution plan on the grounds that the bid was submitted after the deadline.

“Our bid is higher and better. Should not this process be carried out in the best interests of the public and have optimum recovery rather than sticking to timelines and procedures,” a source said.