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5/8/2018  The Bhushan companies' case: Double whammy for Tata Steel


Tata Steel is facing a twin-Bhushan problem.
One, it has moved the National Company Law Appellate Tribunal (NCLAT) against National Company Law Tribunal's order asking lenders of Bhushan Power & Steel to consider a bid by Liberty House.
Even in the case of Bhushan Steel, which it has all but bagged under the insolvency process, Tata Steel is facing tough times. It is facing resistance from the employees of its acquired company. A story by Economic Times  says that Bhushan Steel employees in the Odisha plant have resisted moves by Tata Steel to take over the facility.
Both the Bhushan companies belonged to the Delhi-based Singhal family.
Bhushan Power & Steel
Tata Steel had emerged as the clear leader in the race for Bhushan Power & Steel, after its bid emerged higher than that of JSW Steel, the only other company to take part in the auction.
But Liberty House joined the race as a late entrant and offered Rs 1,500 crore more to Bhushan Power &  Steel's lenders, over Tata Steel's 17,000 crore.
The Tata company is clearly unhappy that a bid has been allowed past the deadline. The race is far from over, much to its charging.
When contacted by Moneycontrol, a Tata Steel representative said: "No comments as the matter is sub-judice."
Bhushan Power owes banks over Rs 48,000 crore.
Bhushan Steel
On March 22, Tata Steel was declared as the successful resolution applicant by lenders of Bhushan Steel.
The Tata company had out bid JSW Steel to emerge the winner in the auction of Bhushan Steel.
Experts say that transfer of control of the asset could take at least six months, and it is unclear who is responsible for running the company in the interim.
The interim period thus can be tricky for the buyer - here Tata Steel - as it takes steps to take over the assets.
The report indicated that officials of Tata Steel are being prevented from entering the Bhushan Steel plant located in Dhenkanal, in Odisha.
It hasn't helped that rumours bound of a possible job cut, making the plant employees jittery.
A lawyer, talking on conditions of anonymity, told Moneycontrol that it is the responsibility of the lenders and resolution applicant, who was overseeing the auction, to ensure a smooth handover of the asset.