The National Company Law Appellate Tribunal (NCLAT) on Monday declined to stay Tata Steel Ltd’s acquisition of debt-laden Bhushan Steel Ltd under the insolvency and bankruptcy code, but issued notices to Tata Steel, the resolution professional and committee of creditors (CoC) of Bhushan Steel on a petition filed by its promotor Neeraj Singal challenging the sale.
“Let us decide the law but not stall the process,” the NCLAT bench said, adding that the resolution process would be subject to the final outcome of the case. The bench directed the matter to be listed on 30 May and asked the parties to file their replies in a week.
Larsen and Toubro Ltd, which is an operational creditor of Bhushan Steel, has also approached the appellate tribunal against NCLT’s order approving sale of the debt-ridden firm to Tata Steel. L&T’s plea would be heard on Tuesday.
In his petition, Neeraj Singal challenged the eligibility of Tata Steel as resolution applicant under Section 29 A of the Insolvency and Bankruptcy Code. He further contended that no notice was given to him when the committee of creditors was approving the resolution plan. He also alleged that a copy of the resolution plan was also not given to him.
Singal has sought stay on the order of the NCLT, which had approved Tata Steel’s bid for Bhushan Steel under corporate insolvency resolution process. Singal, who holds around 22% stake in Bhushan Steel, has requested the NCLAT to maintain status quo over the company’s shareholding.
Tata Steel had on Friday said it has taken a controlling stake of 72.65% in Bhushan Steel and paid the admitted corporate insolvency costs and employee dues, as required under the insolvency and bankruptcy code. Further, settlement of amounts equivalent to Rs35,200 crore towards financial creditors of Bhushan Steel is being undertaken, and Rs1,200 crore will be paid to the operational creditors of Bhushan Steel over a period of 12 months, said the statement.
At 12.05 pm, Bhushan Steel shares were trading 4.55% higher at Rs29.00, Tata Steel shares were 1.52% lower at Rs582.50 on the BSE while the benchmark Sensex was down 0.49% at 34676.86 points.
Source: Livemint, May 21, 2018