13 March 2019: The National Company Law Appellate Tribunal (NCLAT) will on Thursday hear a petition moved by promoters of Essar Steel India against the National Company Law Tribunal (NCLT)-Ahmedabad’s judgment approving ArcelorMittal’s resolution plan for debt-laden Essar Steel.
The NCLT-Ahmedabad had on March 8 approved ArcelorMittal’s Rs 42,000-crore takeover bid for debt-laden Essar Steel.
Three directors of Essar Steel had mentioned the issue on Monday before a two-judge Bench headed by Chairman Justice S J Mukhopadhaya. The Bench had asked the matter to be listed after the full written order of NCLT-Ahmedabad was uploaded.
The three directors of Essar Steel are Prashant Ruia, Dilip Oommen, and Rajiv Bhatnagar.Apart from the directors, dissenting financial creditor Standard Chartered Bank (StanChart) had also approached the NCLAT on Monday.
StanChart had alleged it was being discriminated against by the committee of creditors (CoC) of Essar Steel as it had been allotted a very less value against its claim. The allegation was, however, rejected by the CoC, which had told NCLT-Ahmedabad that the bank was, in fact, getting two times its share. Essar Steel had defaulted on its guarantee for StanChart’s loan to its Mauritius-based subsidiary Essar Steel Offshore worth Rs 3,700 crore.
ArcelorMittal’s bid for the company includes an upfront payment of Rs 42,000 crore towards the debt resolution of Essar Steel, with an additional Rs 8,000 crore of capital infusion into the company to support operational improvement, increase production levels, and deliver enhanced levels of profitability.
In October 2018, the CoC of Essar Steel had voted to approve ArcelorMittal’s plan and a letter of intent was issued.