Mumbai: The Ahmedabad bench of the National Company Law Tribunal (NCLT) has approved ArcelorMittal’s Rs 42,000-crore bid to take over beleaguered Essar Steel Ltd. This translates into a haircut of 14 per cent for the lenders.
ArcelorMittal’s takeover proposal for the indebted steel-maker was approved by the Essar Steel’s Committee of Creditors (CoC) last October and it was pending before the NCLT for approval since.
However, it may still not be the end of the game, as a statement from Essar indicated that its promoters would continue to fight to regain control of their company. “We continue to believe that our settlement proposal of Rs 54,389 crore is the most compelling one available to Essar Steel creditors and fulfills the IBC’s declared overriding objective of value maximisation, which has been established time and again by courts at all levels. We are also confident of the legal validity of our said offer made under Section 12A, which provides for the withdrawal from the IBC process by making full payment to the creditors” said an Essar statement.
"We are awaiting a copy of the NCLT order, and will take a call on next steps after examining the same,” added the statement.
A spokesperson from ArcelorMittal said, “We welcome today’s pronouncement...we hope to complete the transaction as soon as possible.”
Clearing ArcelorMittal's bid, NCLT said that it cannot impose judicial view over banks’ wisdom. However, asking the CoC to reconsider distribution of dues, NCLT has suggested that the lenders give 15 per cent of the total offer to operational creditors....