Creditors invite Liberty House to bid for Bhushan Steel assets

Creditors of Bhushan Steel have invited UK-based Liberty House to bid for the non-performing assets of the steel maker well after the deadline, risking the possibility of a legal tussle in the process of recovering bad loans of two Bhushan group companies.

The deadline for submitting bids for Bhushan Steel was 3 February while for Bhushan Power and Steel the last date was 8 February. Only JSW Steel and Tata Steel had submitted bids by the deadline.

The company's lenders have invited UK-based Liberty House to submit bid for the assets well after the deadline, a BusinessLine report quoted a Liberty House spokesman as saying.

''We have been invited by the lenders to bid for both the Bhushan assets and we will be doing so in two weeks,'' the report quoted the Liberty House spokesman as saying.

JSW Steel is reported to have bid Rs29,700 crore for Bhushan Steel, with an offer to repay Rs28,000 crore up front and the rest in equity.

Tata Steel, the other contender, has submitted a bid for Rs24,000 crore.

Against these Bhushan Steel owes banks Rs44,500-crore which the lenders are now trying to recover through the sale of assets.

JSW Steel is also the highest bidder for Bhushan Steel and Power, agreeing to pay Rs13,000 crore while Tata Steel has bid Rs11,500 crore for the asset.

With the bid amounts now in public domain, the original bidders have slammed the lenders move to invite Liberty House, terming it as ''a natural injustice.'' This could lead to a legal challenge, sources said.

Alternatively, lenders could now ask bidders to revise their bids in order to ensure better loan recovery.