Bhushan Power: Liberty tops Tata bid

MUMBAI: UK-based

Liberty House

has emerged as the top bidder for

Bhushan Power and Steel

, trumping Tata Steel with a Rs 18,500-crore offer. Tata Steel has offered Rs 17,000 crore for the troubled metals company, which owes over Rs 40,000 crore to creditors.


The creditors of Bhushan Power on Friday opened the bids after the

National Company Law Tribunal

(NCLT) directed them to do so. Though Liberty’s bid is superior, Tata Steel may move the National Company Law Appellate Tribunal (NCLAT) to challenge the tribunal’s decision of directing the creditors to consider the UK-based company’s application despite submitting the bid after the deadline. The creditors will meet again in a few days to consider the eligibility of bidders.

Besides an upfront payment of Rs 17,000 crore, Tata Steel has offered Rs 7,000 crore to meet Bhushan Power’s working capital needs. Liberty too has offered working capital commitments towards Bhushan Power, the details of which couldn’t be ascertained. Liberty had earlier stated that Bhushan Power, which makes auto grade steel, fits well with its commodity play. A controlling stake in Bhushan Power will give Liberty a foothold in the fast growing automotive steel market in India at a time of strong price upswing.

The liquidation value and fair value of the Sanjay Singhal-promoted Bhushan Power is Rs 9,000 crore and Rs 24,000 crore. Singhal’s younger brother Neeraj Singhal-promoted Bhushan Steel has gone to Tata Steel, which emerged as the highest bidder for the bankrupt company, beating JSW Steel.

Bhushan Power is the second insolvent asset for which Liberty has emerged as the top bidder after Amtek Auto. However, a final word on Liberty’s winning bid will be decided by NCLT-Chandigarh after resolving eligibility issues. Liberty, which has major plans in India, has also bid for ABG Shipyard, Adhunik Metaliks and Castek Technologies. For ABG Shipyard, Liberty is the lone bidder.

Bhushan Power had an outstanding principal amount of Rs 42,000 crore with total claims of Rs 47,200 crore. Liberty’s offer is with nearly 60% haircut on the debt of the company and is in line with market expectations. Punjab National Bank leads the consortium of lenders to the company. However, SBI is understood to have the largest exposure. Although Tata Steel’s resolution plan for Bhushan Steel has been accepted by the committee of creditors, Larsen & Toubro has filed an objection to the resolution plan on the grounds that Bhushan Steel owes it Rs 900 crore. If the two Bhushan proposals go through, it will help to bring down the non-performing assets of Indian banks substantially.

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