New Delhi: Tata Steel Ltd on Thursday alleged that lenders to debt-laden Bhushan Power and Steel Ltd (BPSL) have violated orders of the National Company Law Appellate Tribunal (NCLAT) by allowing rival JSW Steel Ltd to change the basic parameters of its bid three times after 13 August 2018.
NCLAT had, in an interim order on 6 August, allowed all three contenders—Tata Steel, Liberty House and JSW—to file additional unconditional “resolution plans" by 13 August, improving their financial offer without compromising the basic parameters of the “resolution plans" already submitted by them.
However, the committee of creditors (CoC) allowed JSW to change the basic parameters of its resolution plans.
“NCLAT had fixed 13 August as the cut-off date for offers to be finalized. But on 14 August, there were oral clarifications after which the basic features of the plan changed," said senior advocate Abhishek Manu Singhvi, appearing on behalf of Tata Steel, seeking the minutes of the CoC meeting held on 14 August to be submitted to the appellate tribunal.
According to Tata Steel, the plan submitted by JSW stated that equity infusion would be done from time to time whereas theirs contained upfront equity infusion. On 14 August, JSW changed this basic parameter, said Singhvi. This is as good as submitting a fresh resolution plan, which is against the order passed by NCLAT on 6 August, he said.
The JSW bid was further modified twice in early October, he said.
In October, more than two-thirds of lenders to BPSL voted in favour of a revised offer by JSW Steel, turning on the heat in a contest for an asset that is also being pursued by Tata Steel and UK’s Liberty House.
In the initial round of bidding, BPSL received bids of ₹ 11,000 crore from JSW Steel, ₹ 17,000 crore from Tata Steel and ₹ 18,500 crore from Liberty House. Sajjan Jindal-promoted JSW Steel subsequently revised its bid to ₹ 19,700 crore, which has now won the lenders’ approval.
A two-member NCLAT bench headed by chairperson Justice S.J. Mukhopadhaya heard the arguments made by the counsel appearing for Tata Steel and listed the matter to be heard next on 3 December.
BPSL, which owes more than ₹ 48,500 crore to a consortium of lenders led by Punjab National Bank, is one of the 12 large companies identified by the Reserve Bank of India for early resolution. It operates a 3.5 million tonne steel plant in Odisha.