Apprehending further delay in the resolution process, lenders to Bhushan Power and Steel (BPSL) on Tuesday urged National Company law Tribunal (NCLT) not to give operational creditors any further hearing as the adjudicating authority proceeds to approve the resolution plan for the debt-ridden steelmaker.
Senior counsel Ramji Srinivasan, appearing on behalf of the Committee of Creditors (CoC), said that more than 570 days have gone past since NCLT’s principal bench admitted insolvency proceedings against BPSL and each day, lenders are incurring a Rs 12 crore loss for their exposure to the insolvent firm.
“BPSL has 1,778 operational creditors. It will take a hell lot of time to hear out their applications. They should also not have any grudge since they will have to take only 50% haircut compared with 60% by the financial creditors,” Srinivasan said.
BPSL’s operational creditors have moved a series of applications to NCLT seeking to attract its attention on a range of issues including alleged trimming of the operational creditors’ list by the resolution professional and not getting copies of the resolution plan, among others.
NCLT’s principal bench admitted on July 26, 2017, Punjab National Bank’s plea for initiation of the corporate insolvency resolution process (CIRP) against BPSL. In July last year, lenders voted in favour of JSW Steel’s resolution plan for BPSL, rejecting Tata Steel’s offer.
JSW Steel has offered to pay Rs 19,350 crore to the financial creditors of the debt-ridden BPSL, implying a near 60% haircut for lenders. Apart from this, the Sajan-Jindal promoted company has offered to pay operational creditors a sum of Rs 350 crore against their admitted claims of Rs 733 crore.
The NCLT on Tuesday said it would hear the matter on March 5 and decide whether notices are to be issued to the operational creditors or not, and also on whether other parties would be served notice on their applications.
Paving the way for JSW Steel to take over BPSL, National Company Law Appellate Tribunal (NCLAT) on February 4 had dismissed Tata Steel’s objections that lenders had given the Sajjan Jindal-led firm undue chances to revise its bid even after declaring Tata Steel as the preferred bidder.
In its order, NCLAT also asked the resolution professional to submit the best plan to the NCLT and asked the adjudicating authority to pass an order after evaluating the bid and keeping in mind the interests of operational creditors.
A clutch of 34 financial creditors have claimed Rs 47,303 crore from the company as on January 3, 2019, of which, the RP has admitted claims worth Rs 47,150 crore. Operational creditors, numbering 1,778, have claimed Rs 2,320 crore from BPSL though the admitted amount is Rs 733 crore.
Source: Financial Express, February 27,2019