New Delhi: In a major boost to global steel giant ArcelorMittal, the National Company Law Appellate Tribunal (NCLAT) has on Monday given a conditional go-ahead to the company’s Rs 42,000-crore takeover offer for debt-ridden Essar Steel.
The tribunal said the acceptance of the resolution plan, submitted by ArcelorMittal and partner Nippon Steel & Sumitomo Metal Corp, will be subject to its final order in the appeal filed by the promoters.
Sources said Essar Steel is expected to challenge the appellate order in the Supreme Court.
A two-member bench headed by Justice SJ Mukhopadhaya said Essar Steel’s resolution professional is entitled to disburse the funds among the company’s financial and operational creditors. “The resolution professional will be the chairperson of the monitoring committee and will act in accordance with law to ensure that the company is a going concern,” the tribunal said.
As far as the prime financial creditors are concerned in this case, four lenders with the largest exposures, namely Edelweiss ARC, State Bank of India (SBI), IDBI Bank and ICICI Bank, are part of the Committee of Creditors (CoC).
Standard Chartered too moved the NCLAT against the plan as its counsel contended that the bank was being given only 1.7 per cent of its total dues from Essar Steel, while other financial creditors forming part of CoC were getting over 85 per cent of their dues.
Last Friday, NCLAT had refused to stay the National Company Law Tribunal’s (NCLT) Ahmedabad bench order approving steel baron Lakshmi Mittal’s takeover bid for Essar Steel, and asked for a fresh plan for the distribution of bid amount between financial and operational creditors of the firm.
In Monday’s order, the appellate tribunal also said it would also look into the issue of discriminatory distribution of the funds between financial and operational creditors. It has also asked the Insolvency & Bankruptcy Board of India (IBBI) to submit a ratio of distribution of funds between financial and operational creditors.
