Exclusive: Liberty House enters fray for Bhushan Power & Steel, to put in bids by end of Feb

UK-based Liberty House, owned by British industrialist of Indian origin Sanjeev Gupta, has entered the fray for acquiring the bankrupt Bhushan Power & Steel.

Though the deadline for bids for the troubled company was February 8, Liberty House confirmed that it has been asked to send its proposal. The USD 6.8 billion group has interests in steel, commodities and engineering products.

"Yes, we are interested in Bhushan Power and Steel. It is part of our global strategy," a Liberty House spokesperson told Moneycontrol. "We have been invited by the lenders to submit bids. We expect to put in the bid by the end of this month," the executive added.

JSW Steel and Tata Steel had submitted bids for Bhushan Steel & Power, which owes banks nearly Rs 50,000 crore in loans. While the Jindal company had bid Rs 13,000 crore, Tata Steel's proposal valued Bhushan Steel & Power at Rs 11,500 crore. The lenders had put a liquidation value of Rs 9,000 crore for Bhushan Steel & Power.

Sources in the industry said that the bids will be examined by the Committee of Creditors on February 23. The Committee, consisting of the lenders, will possibly choose the best bid (financially and also based on the resolution plan) and recommend it to the National Company Law Tribunal (NCLT).

Twist in the tale

Entry of Liberty House adds a dimension to the whole auction process of stressed assets under the Insolvency and Bankruptcy Code (IBC).

"While till now banks have asked for revised bids, like in the case of Binani Cement and Amtek Auto, this will be the first time a bid will be accepted after the deadline has passed," said an executive from the industry.

This may be contended by other bidders. "There is a possibility that other bidders may protest, or even sue if Liberty House's bid is accepted," said a source close to a company interested in Bhushan Power & Steel.

If the bid from Liberty House is accepted, a precedent will be set and may open up other auctions too. There is a buzz in the industry that auction of other companies such as Essar Steel and Bhushan Power may be impacted by the present development.

Amtek bid

Meanwhile, Liberty House has submitted a revised bid for Amtek Auto on February 9. Lenders had rejected the initial bids for the troubled auto components maker, asking the bidders to come back with a revision.

The auction of Amtek, which has a debt pile of Rs 12,700 crore, also saw bid from hedge fund Deccan Value Investors.

A report by Economic Times said that Amtek's liquidation value is pegged at about Rs 4,200 crore. But the initial bids by Liberty House and Deccan Value were lower than the liquidation value.

Liberty House had last year acquired the UK business of Amtek. The Group's specialty steels unit supplies high end metal to clients like Jaguar Land Rover and Rolls Royce.

The Group is also assessing the possibility of bidding for the debt-laden ABG Shipyard. "We are following the process," said the spokesperson. ABG Shipyard is one of the 12 companies that have been referred to the NCLT.