6 March 2019: A forum of operational creditors with over Rs 1 crore in admitted dues from Essar Steel has appealed to ArcelorMittal which is in the process of acquiring the debt-ridden company, to pay their dues as well.
Last October, a committee of Essar Steel creditors had picked ArcelorMittal to acquire the 10-million tonne steel mill for over Rs 42,000 crore. But the original promoters, the Ruias made a counter bid with Rs 54,384 crore offer later and was rejected by the lenders and the resolution professional.
The NCLT Ahmedabad has been directed by NCALT to conclude the process by March 8.
ArcelorMittal’s resolution proposal also includes an additional Rs 8,000-crore of capital injection into the company to improve operational efficiencies, increase production and deliver enhanced levels of profitability.
In its appeal, a forum of operational creditors with over Rs 1 crore of dues, said it is unfair that ArcelorMittal is not paying a penny to such creditors.
Essar Steel’s operational creditors with large dues include the national oil marketer IndianOil with over Rs 3,500 crore of dues.
“Our appeal is that ArcelorMittal may graciously and voluntarily modify their offer a bit and pay us also if not in one go at least in installments, over the next 12 months,” the forum said.
Noting that the buyer is paying in full those operational creditors with less than Rs 1 crore dues, the forum said “it’s extremely discriminating and wholly arbitrary. The operational creditors with over Rs 1 crore dues are being singled out as if they are being punished. What crime have we committed?”
Late last month, the National Company Law Appellate Tribunal (NCLAT) had directed the NCLT Ahmedabad to take a decision by March 8 on the Rs 42,000-crore bid submitted by ArcelorMittal for the acquisition of Essar Steel.
The resolution process is nearing 600 days instead of the mandated 270 days.
Essar Steel runs a 10-million-tonne steel mill at Hazira in Gujarat and owes over Rs 49,000 crore to over two dozen banks led by the SBI and has been under the bankruptcy proceedings since June 2017.