New Delhi: On Wednesday, March 20, the National Company Law Appellate Tribunal (NCLAT), directed the resolution professional of Essar Steel to conduct a meeting with the committee of creditors (CoC) to discuss and deliberate on the distribution of the Rs. 42,000 crores cash settlement to the lenders as part of the ArcelorMittal takeover of debt-ridden Essar Steel.
The matter was heard before a two-member bench headed by Justice S.J. Mukhopadhaya, who has recommended ArcelorMittal fund distribution between the financial and operational creditors to be reconsidered.
The recommendation to conduct a deliberation meeting was given during the hearing of a plea by Standard Chartered Bank, who had moved the Tribunal raising concerns pertaining to the resolution plan approved by the CoC of Essar Steel. The matter has been listed for further hearing on March 27.
ArcelorMittal, a joint venture with Japan’s Nippon Steel & Sumitomo Metal Corp has offered a cash settlement of Rs. 42,000 crores to lenders and an Rs. 8,000 crore capital infusion. Moreover, as per its annual report, the global steel giant is planning a capital expenditure programme for the assets till 2024. However, if the Mittal resolution plan is implemented, the dissenting bank SCB will only receive Rs. 60 crores against its claim of over Rs. 3,000 crores from Essar Steel.
The Tribunal further upheld in “letter and spirit” the order by the NCLT Ahmedabad bench by approving the resolution plan and accepting the global steel giant ArcelorMittal to take over Essar Steel Ltd.
The debt-ridden Essar Steel case was among the first 12 cases shortlisted by the RBI to be resolved under the Insolvency and Bankruptcy Code.