Essar Steel’s committee of creditors (CoC) has set up a monitoring committee to oversee the operations of the steel firm and ensure smooth transition to ArcelorMittal, the successful resolution applicant.
The monitoring committee is headed by resolution professional Satish Gupta and has four members from the lenders and three from ArcelorMittal, a source in the know of the development told The Hindu .
The lenders — SBI, IDBI Bank, ICICI and Edelweiss Asset Reconstruction Company — have their representatives as members of the monitoring committee.
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The development comes after the National Company Law Appellate Tribunal (NCLAT) asked the CoC to set up a monitoring committee to oversee the operations of the steel firm and smooth transition to ArcelorMittal.
“The resolution professional will be the chairperson of the monitoring committee and will act in accordance with law to ensure that the company is a going concern,” the tribunal had ordered last month.
The monitoring committee has been set up even as the CoC is divided on how to split the ₹42,000 crore upfront cash payment offered by the buyer, between the financial creditor and operational creditor, as per the NCLAT order.
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SCB’s share
The NCLAT had suggested more cash to Standard Chartered Bank (SCB). SCB had made a claim of ₹3,487 crore against the company, but is to receive only ₹60 crore, or 1.7% of its dues, as per the resolution plan, while other lenders are to get 92%.
State Bank of India (SBI) had moved the Supreme Court against the NCLAT order, opposing equal treatment to SCB, contending that the bank was not a secured creditor as its loan was not to Essar Steel directly, but to a promoter entity.
ArcelorMittal is likely to pay ₹42,000 crore upfront cash to the lenders, after the latter settle on the amount to be divided between the financial creditors and operational creditors. ArcelorMittal is also preparing its crack team to take over operations of Essar Steel and inject ₹8,000 crore for a quick turn around.