Ahmedabad: The NCLT is anticipated to determine a landmark judgement pertaining to the approval or rejection of the Rs. 42,000 crore takeover bid for insolvent Essar Steel by Arcelor Mittal.
Essar Steel having prolonged by 570 days, the bidding process was finally concluded and objections raised therein by several parties were also taken into consideration. Thereafter, the bench reserved the matter for its order. However, all parties including Arcelor Mittal, Committee of Creditors (CoC) and the Resolution Professional (RP), are granted the opportunity of being heard by submitting their respective written submissions by Monday, February 18.
The original promoters owed over Rs. 49,000 crores to lenders led by the SBI. Pursuant to the submission by the resolution professional, the bench from Wednesday, January 30, proceeded with the resolution plan application, wherein a proposal of Rs.54,389 crores were submitted to repay the committee of creditors. As per the resolution plan submitted by Arcelor Mittal, it proposed to pay Rs. 42,000 crores to creditors, whereas, Rs. 8000 crores shall be kept for capital.
During the hearing, the Counsels for both RP and CoC affirmed the bid by Arcelor Mittal of being compliant with the provisions of the IBC and also as per the Supreme Court order dated October 2018. The Counsels for the two parties submitted their respective opinions after considering and comparing bids by Vedanta and Arcelor Mittal.
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 also dismissed a new plea on grounds of its previous order where it had dismissed their offer of Rs 54,000 crore as a settlement plan for Essar Steel.
Previously, Karur Vysya Bank (KVB) had sought dues amounting over 3 crores from Arcelor Mittal, who was a related party in the KSS Petron. However, the Bank’s plea was objected by CoC and RP on grounds of undue delay raising its contentions. "It is only on October 19, 2018, that KVB applies for its claim with KSS Petron's RP, which the latter accepted on October 31," submitted the CoC. Thus, now the bank ought to move the apex Court and not the Tribunal. However, the NCLT has granted the bank an opportunity of being heard, pursuant to which the Tribunal shall pass its order.