9 April 2019: Arcelor Mittal Group-led Committee of Creditors (CoC) has rejected the resolution plan of Royal Partners Investment Fund, a sole bidder for KSS Petron and has approached the dedicated bankruptcy court for liquidation of the stressed asset.
On Monday, advocate Jitendra Kumar, representing the resolution professional (RP) of KSS Petron, said, the CoC had on February 7 decided to liquidate the firm. “We are seeking court’s approval for the same,” he added.
Mauritius-based Royal Partners (also known as RPMG Investments) has submitted a bid to buy the firm.
“We are challenging the rejection of our bid and also the constitution of CoC because one single lender owns over 99% in the firm and they are also related party in the matter,” argued Royal Investment Partners’ lawyer.
In an email, Mayur Ghule, managing director at RPMG Investments told ET that it has challenged the CoC ruling in the NCLT, without divulging other details.
Arcelor Mittal India, which owns around 99.76% voting power in the CoC, is also vying for Essar Steel. Lakshmi Mittal, chairman of the steel major held a 33% personal stake in KazStroyService (KSS), the parent company of KSS Petron, which he sold off before bidding for Essar Steel as promoters of defaulting companies are barred from bidding for other companies.
This, however, was not recognised by the Supreme Court and in it’s October ruling last year, it asked it to pay dues owed by both Uttam Galva and KSS Petron, amounting to Rs 7,469 crore (including Rs 1,647 crore owed by KSS Petron) to become eligible to bid for Essar.