New Delhi: Larsen and Toubro Ltd (L&T) on Monday submitted its objections to Tata Steel Ltd’s resolution plan for Bhushan Steel Ltd before the National Company Law Tribunal. The plan was approved by the committee of creditors (CoC) of the debt-laden steel maker.
Mukul Rohatgi, appearing for L&T, argued that Tata Steel’s proposal of Rs200 crore on pro rata basis for all operational creditors and then an additional Rs1,000 crore on preferential basis left room for arbitrariness as it was discretionary. He submitted that L&T had supplied “huge parts of the steel plant", over which L&T held charge under the Transfer of Property Act.
Bhushan Steel owes over Rs900 crore to L&T, its operational creditor, for supply of certain capital goods. L&T had moved NCLT on 8 March to be declared as a secured creditor in the Bhushan Steel insolvency process.
Another objection to Tata Steel’s resolution plan was raised by insolvency resolution professional to Bhushan Energy Ltd, Bhushan Steel’s captive power plant.
Bhushan Energy objected to the proposal to terminate all power purchase agreements between the two related companies and subsequent relinquishment of any dues payable by Bhushan Steel to Bhushan Energy. The power purchase agreement between Bhushan Energy and Bhushan Steel are proposed to be terminated as per Tata Steel’s resolution plan for being “onerous" as they “brought down the company’s profit". The IRP for Bhushan Steel had submitted Tata Steel’s resolution plan before the NCLT for its approval on 2 April. Tata Steel’s resolution plan was approved by the CoC with 99.8% majority vote.
The matter would be next heard on 10 April.