9 April 2019: The National Company Law Appellate Tribunal (NCLAT) on Tuesday said it may direct ArcelorMittal, in the next hearing on April 23, to deposit Rs 42,000 crore for acquisition of the insolvent Essar Steel in a separate account.
The two-member bench, headed by Justice S.J. Mukhopadhaya, also directed ArcelorMittal to file an affidavit detailing the steps to be undertaken in the resolution plan of Essar Steel.
Arcelor told the NCLAT that it is ready to bring in money, but can’t deposit it without the lenders executing a debt assignment agreement in the favour of the company, adding that there is some reluctance on lenders’ part to execute this agreement.
The Delhi-based appellate tribunal had approved ArcelorMittal’s bid of Rs 42,000 crore on March 18, dismissing the Essar promoters Ruias’ plea against the approval of the NCLT’s Ahmedabad bench to the bid.
ArcelorMittal’s resolution proposal for Essar Steel provides financial creditors Rs 41,987 crore out of their total dues of Rs 49,395 crore. Operational creditors, under the plan, would get Rs 214 crore against the outstanding Rs 4,976 crore. They are contesting this before the NCLAT.
Essar Steel owns a 10-million-tonne steel mill in Hazira, Gujarat. It was was among the first 12 cases selected by the Reserve Bank of India to be resolved under the Insolvency and Bankruptcy Code.
According to reports, the company has recorded its best ever production at 6.8 million tonnes, higher by 10 per cent over the previous year and around 24 per cent in 2016-17.