NCLT refuses to stay Liberty House ruling

KOLKATA | NEW DELHI: The National Company Law Appellate Tribunal (NCLAT) on Wednesday refused to overturn an order directing Bhushan Power & Steel’s creditors to consider a late bid by UK’s Liberty House for the stressed company.

Tata Steel had appealed in the NCLAT against the National Company Law Tribunal’s April 23 order on grounds that Liberty House submitted the bid well past the February 8 deadline to do so.

Tata Steel submitted its offer for the company on February 8, in adherence to the timelines. Its offer at that time exceeded that of JSW Steel, the only other bidder to have submitted a bid for the company, by a significant margin.


Tata Steel’s offer provided for an upfront payments of Rs. 17,000 crore to the lenders and a working capital infusion of Rs. 7,000 crore, ET reported in its edition dated February 19.

Liberty House’s bid was opened by the committee of creditors on April 27. Its bid was higher than Tata Steel’s by Rs. 1,500 crore as it offered an upfront payment of Rs. 18,500 crore to creditors.

NCLAT said the committee of creditors could consider the resolution plans submitted by both Liberty House and Tata Steel. It noted that the final decision could only be implemented with its consent. The resolution plan selected by the committee will have to be submitted in a sealed cover to the NCLAT.

The resolution plans have to be assessed "qualitatively", the NCLAT said. This means just bidding for a higher amount is not the only factor that will make a bid better, according to people in the know of the matter. The lenders will have to consider a combination of factors including payouts to operational creditors and employees.