23 July 2019: The National Company Law Appellate Tribunal’s order in the ArcelorMittal-Essar Steel case is not applicable to Ruchi Soya Industries Ltd. as it is already under trial, lenders to the firm said on Tuesday.
The counsel for the committee of creditors of Ruchi Soya said the judgment will not apply to any matter, which are under trial or going through the insolvency process, hence is also not applicable to the Ruchi Soya case.
On July 9, the Mumbai bench of the National Company Law Tribunal had directed all stakeholders, including the resolution professional and the lenders, of Ruchi Soya to find out whether NCLAT’s order in the ArcelorMittal-Essar Steel case would have any impact on the Ruchi Soya insolvency case.
The NCLAT has ordered almost equal treatment of operational and financial creditors of Essar Steel in payout of ArcelorMittal’s Rs 42,000 crore offer for the steelmaker.
The NCLT observed that the NCLAT order has changed the entire outcome for all stakeholders and is like a formula with clear-cut directions on the distribution of the proceeds should be carried out. Reserving an order on Ruchi Soya, the tribunal said the resolution plan is required to be further discussed.
On Monday, however, the Supreme Court put on hold Essar Steel’s sale to ArcelorMittal as it agreed to hear an appeal filed by financial lenders against the NCLAT order, saying it would like to settle the issue “once and for all”.
Meanwhile, the counsel of Patanjali Ayurved Ltd. said that it stands by its resolution plan for Ruchi Soya.
In December 2017, NCLT referred Ruchi Soya for insolvency on applications moved by Standard Chartered Bank and DBS Bank and appointed Shailendra Ajmera as the resolution professional.
Patanjali, who initially lost out to Adani Wilmar in the race to acquire Ruchi Soya, hiked its bid value by around Rs 140 crore to Rs 4,350 crore, including a capital infusion of Rs 1,700 crore.
Ruchi Soya owes over Rs 9,345 crore to its financial creditors.