Liberty House allowed to bid for Bhushan Steel, is sole bidder for ABG Shipyard

A month after Tata Steel successfully bid for debt-laden Bhushan Steel, the National Company Law Tribunal (NCLT) on Monday asked the lenders of Bhushan Power & Steel to consider the bid submitted by UK-based Liberty House as well.

The London-based metals group also emerged the sole bidder in a third round of bidding for ABG Shipyard Ltd when the deadline for submission of resolution plan for the debt-ridden shipbuilder ended on Monday.
Liberty House had moved the NCLT on 26 February against the rejection of its bid on account of late submission.  
Allowing the plea of Liberty House, a two-member NCLT bench, headed by Justice M M Kumar, said that Liberty House bid cannot be disqualified only on the ground of being submitted after the deadline set by the resolution professional.
The tribunal has directed the committee of creditors (CoC) led by Punjab National Bank (PNB) to complete its resolution proceedings by 23 June.
“We hope the CoC takes an appropriate commercial decision as per the Insolvency and Bankruptcy Code (IBC),” said NCLT.
Tata Steel was the highest bidder at the close of the deadline — with an offer of Rs35,000 crore — for the purchase of a controlling stake in Bhushan Steel.
The other major bidder was JSW Steel. Earlier this month, after Tata Steel was selected as the preferred buyer, employees of Bhushan Steel had challenged the decision.
Tata Steel has since been declared as the successful resolution applicant by the committee of creditors (CoC) of Bhushan Steel Ltd.
It also accepted the letter of intent for Bhushan Steel under the corporate insolvency resolution process of the Insolvency and Bankruptcy Code 2016.
The tribunal’s order came over a petition filed by Liberty House, challenging the rejection of its bid by the RP for Bhushan Power and Steel on account of late submission.
The CoC had in February rejected Liberty House’s bid to acquire Bhushan Power and Steel, leaving Tata Steel and JSW Steel in the race for taking over the assets of the bankrupt firm. Liberty House had moved the NCLT on 26 February against the rejection.
Liberty House had submitted before the NCLT that the resolution professional rejected its bid to acquire Bhushan Power and Steel without even opening the seal of its offer.
Bhushan Power Steel Ltd has a 5-million tonne steel plant in Odisha. It owes about Rs45,000 crore to its lender.
Liberty House has also emerged the sole bidder yet again in a third round of bidding for ABG Shipyard Ltd when the deadline for submission of resolution plan ended on Monday.
The bid submitted by Liberty House was accepted by the interim resolution professional (from BDO India LLP tasked with overseeing the process for ABG Shipyard, which is facing bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC), reports quoting sources briefed on the bid submitted by Liberty House said.
Liberty House has cleared some $2.8 million it owed Exim Bank to become eligible to bid for the shipyard. Non-payment of the amount was cited by the committee of creditors to reject the bid, under Section 29 (a) of the IBC, submitted by the Liberty House on 16 April during an earlier round of bidding.
ABG Shipyard is among the list of 12 large companies that the RBI had identified in June 2017 for banks to refer to the bankruptcy court immediately.
The resolution of ABG Shipyard has to be completed by April 30, according to the time-line set by the National Company Law Tribunal (NCLT), which was set up to oversee the bankruptcy law aimed at fixing the country’s mounting bad bank loans.
The lenders have set a liquidation value of Rs2,200 crore for the yard that owes some Rs18,245 crore to a clutch of banks led by ICICI Bank.
Liberty House was the lone bidder in the first round of bidding, but its bid was rejected as it was below the liquidation value set by the creditors.
In the second round of bidding, Liberty raised the bid amount, offering Rs5,200 crore on a deferred payment basis stretching over five to 10 years for the yard. The bid also included an upfront amount of Rs400 crore and issue of debentures.
The business plan submitted by Liberty House also included completing the pending ship orders and then pursuing a combination of shipbuilding and ship-breaking business. It also included setting up a steel rolling mill inside the yard to make steel using materials generated from dismantled ships.