In a move that is likely to delay the resolution of Essar Steel, the Committee of Creditors (CoC) of the company, on Wednesday, rejected bids of ArcelorMittal and Numetal stating that the bids failed to meet the eligibility criteria.
“ArcelorMittal and Numetal bids were ineligible under the amended Section 29 A of the Insolvency & Bankruptcy Code (IBC), that debars related parties from bidding,” a source in the know of the development told The Hindu, adding that fresh bids were likely to be called soon.
Essar Steel, which owes more than ₹45,000 crore to lenders, may see new bidders joining the race besides ArcelorMittal and Numetal.
“The lenders will decide if they want to allow new bidders, who had initially shown interest in the company but did not put in their bids,” said another source. Spokespersons for Essar Steel and ArcelorMittal did not immediately return calls made by this correspondent. Anticipating rejection of its bid, Numetal, led by VTB Capital of Russia, approached the NCLT to reinforce its bid. Aurora, owned by Rewant Ruia, son of Essar Steel promoter Ravi Ruia, is a minority shareholder in Numetal, with no right to directorship and management of Numetal.
‘Objective assessment’
“Numetal apprehends that full facts submitted for determination of its eligibility to submit a resolution plan have not been appropriately assessed. Accordingly, in the application, all necessary facts for determining the eligibility of Numetal have been placed before the NCLT for an objective assessment,” Numetal said in a statement.
The Ahmedabad bench of NCLT, on hearing Numetal’s counsel, issued a notice to the Committee of Creditors through the Resolution Professional, stating that any decision taken or resolution passed by the CoC in the meeting on March 21, 2018, would be subject to the outcome of the application. The next date of hearing is April 4, 2018.
