Bhushan Steel: Lenders to Decide on Next Steps After Supreme Court Ruling

New Delhi, May 7 (PTI) Lenders to Bhushan Steel and Power Ltd (BSPL) will in next few days decide on options including seeking a review of the Supreme Court verdict to scrap sale of the company through insolvency process to JSW Steel, Punjab National Bank MD and CEO Ashok Chandra said on Wednesday.

A group of lenders led by PNB had claimed Rs 47,204 crore as unpaid loan and following the default, lenders dragged BSPL to insolvency proceeding. JSW Steel emerged the successful bidder for BSPL, offering Rs 19,700 crore.

As per the Supreme Court decision, BSPL has to be liquidated, which may potentially fetch lower value for the company.

"We are in touch with member lenders and we are going to have meeting in the next 2-3 days to decide on future action," he told media after declaring quarterly numbers.

PNB received about Rs 3,000 crore from the resolution of BSPL, he said.

Last week, the Supreme Court set aside a resolution plan submitted by JSW Steel for BSPL, holding it illegal and in violation of the Insolvency and Bankruptcy Code (IBC).

A bench comprising Justices Bela M Trivedi and Satish Chandra Sharma ordered the liquidation of BSPL under the IBC.

The top court criticised the conduct of all key stakeholders in the resolution process -- the resolution professional, the Committee of Creditors (CoC) and the National Company Law Tribunal (NCLT) -- for enabling what it termed a "flagrant violation" of the IBC.

The verdict declared the orders of September 5, 2019 of the NCLT and the NCLAT judgement of February 17, 2022 as “perverse” and lacking jurisdiction, and consequently set them aside.

The tribunal had initiated corporate insolvency resolution process (CIRP) against BSPL on July 26, 2017.

The bench rejected the resolution plan of JSW, as approved by the Committee of Creditors (CoC), for being non-compliant with the IBC.

It held that the CoC failed to exercise its commercial wisdom while approving JSW's resolution plan, which was in absolute contravention of the mandatory provisions of the IBC and CIRP regulations.

Soon after the apex court verdict, JSW Steel said it will review the Supreme Court order rejecting the company's resolution plan to take over BSPL and decide on future course of action.