Tata Steel favourite in Bhushan Power & Steel race, ahead of NCLAT hearing

Tata Steel has emerged as the favourite to buy the distressed assets of Bhushan Power and Steel, ahead of a crucial hearing of the National Company Law Appellate Tribunal.

In a meeting of  Bhushan Power & Steel's lenders - Committee of Creditors  - on Monday, the Rs 24,500-crore bid from Tata Steel was found to be more favourable.

"The bid includes about Rs 7,500 crore for Bhushan Power's operations and rest for lenders...Liberty House's bid did not have the right backing and commitment," said two sources aware of the development.

Previously, Liberty House had challenged CoC's decision to disqualify it only on the grounds of late submission.

Sources close to the UK based company however added that no final decision has been taken. "The CoC is still evaluating the bids. And queries are to be addressed on both sides. Everyone is waiting for the NCLAT hearing on July 12," a source told Moneycontrol.

Bid controversy

Lenders had  approached the insolvency court seeking clarification in the process after Liberty House had put its bid post the deadline.

The NCLAT, in last hearing, had asked the CoC to proceed with the bids submitted by both Tata Steel and Liberty House in the first round without any re-bidding.

The appellate tribunal also directed the CoC to keep its decision over the bids in a sealed cover and said it would be subject to its final order.

It had also declined the request of lenders to direct both parties to submit fresh bids.

On April 23, the National Company Law Tribunal (NCLT) had directed the lenders of Bhushan Power and Steel, led by Punjab National Bank, to consider the bid submitted by U.K.-based Liberty House for Bhushan Power. Allowing the plea of Liberty House, the tribunal directed the CoC to complete its resolution proceedings by June 23.

Bhushan Power and Steel is among the 12 large non-performing assets (NPAs) referred by the Reserve Bank of India (RBI) to be taken for insolvency in June last year.