NCLT stays Bhushan Power and Steel creditors’ meeting to discuss resolution process
New Delhi: The National Company Law Tribunal (NCLT) on Tuesday stayed the meeting of Bhushan Power and Steel Ltd’s committee of creditors (CoC) which was scheduled to take place on Wednesday to discuss the resolution process.
“We direct the Insolvency Resolution Professional (IRP) and the COC not to proceed with any consideration of resolution process of any other entities as the matter is sub judice before us,” said NCLT president M.M. Kumar, while pronouncing the order.
According to the bench hearing the matter, if COC meets on Wednesday and does not consider UK-based Liberty House’s bid for the debt-ridden Bhushan Power and Steel then it would result in “an element of bias”.
The bench clarified that the time being consumed in litigation would be “knocked off” from the 180-day resolution period. It was also observed that since the resolution period for Bhushan Power and Steel ends on 22 April, there is still time to reconsider Liberty House’s bid.
A company is granted 180 days, which may be later extended to 270 days, to submit a debt resolution plan to the tribunal.
Liberty House had moved the NCLT on 26 February against the rejection of its bid for Bhushan Power and Steel by the CoC for late submission.
The last date for submission of bids was 8 February whereas the IRP for Bhushan Power and Steel Mahender Khandelwal received Liberty House’s proposal on 20 February.
On 6 March, Tata Steel said that it has been identified as the highest bidder under the corporate insolvency resolution process by the COC of Bhushan Power.
Tata Steel also said that is in discussions with advisers to the COC and the IRP on the next steps in the process.
Bhushan Power, which owes at least Rs37,000 crore to a consortium of lenders led by state-run Punjab National Bank (PNB), is among the 12 large companies identified by the Reserve Bank of India for early insolvency resolution.