New Delhi: The National Law Appellate Tribunal (NCLAT) on Thursday posted an appeal moved by Neeraj Singal, the erstwhile promoter and managing director of Bhushan Steel Ltd, challenging the approval of Tata Steel Ltd’s resolution plan for hearing on 21 May.
Singal owns close to 22% shares in Bhushan Steel and would seek a stay on the transfer of his equity to Tata Steel as an interim measure.
The National Company Law Tribunal’s (NCLT) principal bench on 15 May had approved Tata Steel’s resolution plan for debt-ridden Bhushan Steel under the Insolvency and Bankruptcy Code (IBC).
Tata Steel Ltd has offered an upfront payment of Rs35,200 crore to lenders, along with a 12.27% stake in the steel maker, according to its resolution plan. This plan was approved by the committee of creditors (CoC) for Bhushan Steel with a 99.8% majority vote after testing its “commercial viability and feasibility".
According to the resolution plan, Tata Steel has also proposed to pay salary dues to employees of Bhushan Steel and ensure continuation of employment.
The resolution plan also proposes to pay back Bhushan Steel’s operational creditors to the extent of Rs1,000 crore and an additional Rs200 crore on a pro rata basis spread over one year, depending upon “vitality to running the business".
Bhushan Steel’s admitted financial debt stood at Rs56,051.16 crore as on 1 February 2018, and it is one of the 12 defaulters identified by the Reserve Bank of India last year for immediate resolution.
The other resolution applicants in the insolvency process were Bhushan Steel employees and JSW Steel.