Bhushan Power & Steel auction: NCLT to hear Liberty House appeal on March 5

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The race for Bhushan Power & Steel has just got longer, and possibly more competitive.

In a surprise for its competitors, Liberty House’s bid for Bhushan Power & Steel has got a fresh lease of life after the National Company Law Tribunal (NCLT) today accepted an appeal against the rejection of its proposal.

The resolution professional (RP) and Committee of Creditors had last week rejected Liberty House’s bid for Bhushan Power as it was submitted after the deadline had passed, on February 8.

But the UK-based company had approached the NCLT on February 23, asking that its bid should be considered.

According to sources, Liberty House on Monday backed its appeal with a  proposal to turnaround the operations of Bhushan Power & Steel. It also contended that its bid was higher than that of Tata Steel.

Till now, Tata Steel had been leading the race, with a bid of  Rs 17,000 crore against JSW Steel’s Rs 13,500 crore.

Not surprisingly, Tata Steel’s counsel told the NCLT’s Principal Bench in Delhi – hearing the appeal – that Liberty House’s case should be dismissed prima facie. But the judge ruled that the Bench would like to hear in detail what each respondent has to say.

The Bench will now hear the three stakeholders – resolution professional, Liberty House and Tata Steel  - on March 5, after asking them to file submissions through an affidavit.

“The matter is sub-judice,” a spokesperson of Liberty House told Moneycontrol.

“The Tribunal has heard us and heard the RP's counsel as well as Tata's counsel, who intervened. The Tribunal has deemed it fit that the respondents put their submissions on affidavit explaining conduct of the insolvency process. The parties will now be heard on the 5th. We are hopeful that our bona fide will stand out,” added the spokesperson.

Industry executives said the development was unprecedented and would have bearing on rest of the auctions. “This is surprising. Almost everyone expected Liberty’s appeal to be dismissed,” said an official from a steel company.

Bhushan Power & Steel had accumulated nearly Rs 50,000 crore in debts and was referred to the NCLT last year.

Apart from the Bhushan company, Liberty House is also in contention in the auction of Amtek Auto and ABG Shipyard.

Interestingly, the company – owned by billionaire businessman Sanjeev Gupta – had been a savior for Tata Steel in the UK. It had bought some of the facilities of the erstwhile Corus in the UK, reducing the debt burden of Tata Steel. The Indian company had acquired Corus in 2007.