Creditors reject Liberty House bid for Bhushan Power and Steel

Smoke rises from chimneys and facilities of steel plants on a hazy day in Benxi, Liaoning province November 3, 2013. A chronic shortage of natural gas is hurting China's plan to move away from burning coal to heat homes and offices, raising the prospect of more choking air pollution this winter and beyond. The problem is worst in northern China, where air pollution mainly caused by decades of reliance on coal has lowered life expectancy by an estimated 5.5 years compared to the south, Chinese and international researchers said in July. Picture taken November 3, 2013. REUTERS/Stringer (CHINA - Tags: ENVIRONMENT ENERGY) CHINA OUT. NO COMMERCIAL OR EDITORIAL SALES IN CHINA - GM1E9B40RS301

The Committee of Creditors has rejected the bid of UK-based Liberty House to acquire Bhushan Power and Steel Ltd, leaving Tata Steel and JSW Steel in the race for taking over the assets of the bankrupt firm, a source said.

"Committee of creditors (COC) in a meeting today has rejected the bids of Liberty House (of the UK) because the company submitted the bids after the last date of submission date which was February 8," a source privy to the development said.

Liberty House had submitted the bid yesterday, he said.

In today's COC meeting the bids of Tata Steel and JSW Steel were disclosed and now the process as well as legal advisors evaluate them, the source said.

The detailed terms and conditions of the bids were disclosed to the lenders at the meeting, the source said.

Bhushan Power and Steel owes about Rs 45,000 crore to its lenders.

When contacted, Resolution Professional (RP) Mahender Kumar Khandelwal declined to comment on the developments.

The source said that while Tata Steel offered Rs 17,000 crore to the lenders as upfront amount and Rs 7,200 crore for operations of Bhushan, JSW made an offer of Rs 11,000 crore to the lenders and Rs 2000 crore for the operations of the beleaguered power firm.

The COC will now meet on March 6 to take the process forward, including declaration of the highest bidder.

Bhushan Steel and Power was among the 12 non-performing accounts referred by the Reserve Bank of India for National Company Law Tribunal (NCLT) proceedings.

The insolvency process was filed by State Bank of India (SBI), the lead bank of the consortium of lenders, in the case of Bhushan Steel while a similar plea was filed by Punjab National Bank (PNB) against Bhushan Power and Steel.