Ahmedabad: In the fullness of time, the NLCT approved the resolution plan by the global steel giant Arcelor Mittal to take over debt-laden Essar Steel Ltd. The order came amidst a year-long legal dialect among bidders, banks and the Court.
The decision was handed down by the two-member NCLT bench of Justices Harihar Prakash Chaturvedi and Manorama Kumari after the appellate authority had set a deadline last month to close the matter by today.
Arcelor Mittal, a joint venture with Japan’s Nippon Steel & Sumitomo Metal Corp has offered a cash settlement of Rs. 42,000 crores to lenders and a 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.
Till date, this turnover is the largest ever pay-out by a new company to an NCLT asset since the IBC came into effect in May 2016.
Previously, Essar Steel Asia Holdings, the promoters of Essar Steel, moved the Tribunal seeking a copy of the resolution plan by Arcelor Mittal on grounds of being shareholders of the Company. However, the plea was dismissed by the NCLT on grounds of its previous order where it had dismissed their offer of Rs 54,000 crore as a settlement plan for Essar Steel.
On January 29, the National Company Law Tribunal (NCLT) dismissed the proposed debt settlement made by the shareholders of Essar Steel. The bid was rejected by the Tribunal for being in violation of Section 12A of the Insolvency and Bankruptcy Code.
The NCLT order was highly appreciated by Arcelor Mittal, who wish to complete the transaction at the earliest.