MUMBAI (Reuters) - An Indian appeals tribunal has ruled against Tata Steel Ltd’s effort to dismiss rival bids for Bhushan Power and Steel, boosting JSW Steel Ltd’s offer to buy the indebted steel maker.
The National Company Law Appellate Tribunal (NCLAT) said the plea by Tata Steel was “not maintainable” as it was up to the committee of creditors of Bhushan Power and Steel to accept a debt resolution plan that could maximize asset value.
The tribunal said it would not interfere with JSW Steel’s bid because more than 97 percent of the indebted firm’s creditors had approved the plan.
Bhushan Power and Steel, one of India’s most indebted companies, was among the first 12 companies referred by the Reserve Bank of India to a bankruptcy court for a debt resolution process under India’s new insolvency law.
Tata Steel and JSW Steel, India’s top two steelmakers, as well as British metals and industrial firm Liberty House submitted bids.
Tata Steel challenged Liberty’s bid, which it said was submitted after the deadline, and also JSW Steel’s revised, higher offer, which was also submitted after the deadline.
Tata bid 170 billion rupees ($2.4 billion) for the east Indian steel plant, which has capacity to produce 3.5 million tonnes a year. Liberty’s offer was 190 billion rupees, while JSW Steel’s revised, higher offer was about 197 billion rupees.
Tata Steel said it was reviewing Monday’s court order and had no further comment. JSW Steel and Liberty did not respond to Reuters emails seeking comment.
Tata Steel can still challenge Monday’s ruling in the Supreme Court.
JSW’s final 197 billion rupee offer for Bhushan Power and Steel, which had debts of 485.24 billion rupees, included payment to its financial and operational creditors, a source with direct knowledge of the matter told Reuters.
India introduced bankruptcy resolution rules in 2016, after which the central bank initially notified 12 defaulters and then another 28 that the bankruptcy court would take steps to resolve their debts.
Legal wrangling has held back all major debt restructuring of the firms so far, with only 730 billion rupees resolved out of 14.5 trillion rupees of distressed assets.
Reporting by Promit Mukherjee; Editing by Edmund Blair