Liberty House trumps Tata Steel with Rs18,500 cr upfront offer for Bhushan Power

The Committee of Creditors on Friday considered the Liberty House bid following a direction from the National Company Law Tribunal (NCLT), even though the offer came in after the deadline expired.

The NCLT had on Monday asked the lenders of Bhushan Power & Steel to consider the bid submitted by UK-based Liberty House as well.

Liberty House, owned by Indian-born steel tycoon Sanjeev Gupta, had submitted a resolution plan for Bhushan Power on 20 February, after the deadline for submission of bids expired on 8 February. The resolution professional declined to open the delayed bid, Liberty House approached NCLT.

Reports quoting sources at Liberty House said its bids – both financial and operational — have been found superior than that of Tata Steel and that the CoC has to now approve and submit the proposal to NCLT for its final nod.

Liberty House is reported to have offered to pay Rs18,500 crore upfront against Tata Steel’s offer of Rs17,000 crore.

A two-member NCLT bench, headed by Justice M M Kumar, had last week ruled that Liberty House’s bid cannot be disqualified only on the ground of being submitted after the deadline set by the resolution professional.

The tribunal had also directed the committee of creditors (CoC) led by Punjab National Bank (PNB) to complete its resolution proceedings by 23 June.

Until now, Tata Steel was considered the highest bidder for Bhushan Power. With an overall bid of over Rs24,000 crore, Tata Steel had outbid JSW Steel by a wide margin. JSW Steel’s bid was about Rs13,000 crore.

Liberty House’s bid is expected to be much higher than that of the Tatas, sources said.

Tata Steel is expected to move the NCLAT against the ruling to consider Liberty House bid.

Bhushan Power owes about Rs47,301 crore to a clutch of lenders in overdue loans, another Rs706.88 crore to operational creditors and Rs82.73 crore to workmen. Even at the highest bid, creditors will have to take a substantial haircut once the final winning bid is selected.

Meanwhile, L&T, one of the operational creditors, has filed a case with the NCLT to declare it a secured creditor in the Bhushan Steel insolvency process. Bhushan Steel owes over Rs900 crore to L&T.