The National Company Law Appellate Tribunal (NCLAT) on Friday ruled as eligible the second bid of Russian VTB Bank-promoted consortium NuMetal for debt-ridden Essar Steel. However, rival bidder ArcelorMittal would have to first clear all the dues of its subsidiaries to become eligible to bid for the steelmaker, the tribunal said.
The NCLAT gave ArcelorMittal time till September 11 to clear all the dues of its subsidiaries saying that the “stigma will continue” till the payment of all arrears.
Both NuMetal and ArcelorMittal had moved the NCLAT over bidding eligibility. They had filed individual petitions challenging their disqualification in the first round of bids by the Committee of Creditors (CoC).
Even as the bidding for Essar Steel went into a second round, both bidders moved the Ahmedabad bench of the National Company Law Tribunal (NCLT) challenging their disqualification.
The appellate tribunal, in April, quashed the first round of bidding for Essar Steel on the ground that the CoC and the resolution professional did not follow the procedure prescribed under the Insolvency and Bankruptcy Code (IBC). The NCLT, however, gave both the bidder time to cure any defects in their bids. Subsequent to the verdict, NuMetal and ArcelorMittal moved the NCLAT.
Earlier, ArcelorMittal had claimed that it addressed the concerns raised by the Committee of Creditors as it deposited ₹7,000 crore into an escrow account of State Bank of India to clear the defaulted dues of Uttam Galva and KSS Petron. ArcelorMittal had minority stakes in the two companies.
NuMetal also removed Rewant Ruia, son of Essar Group co-Founder Ravi Ruia, from the company’s shareholding to become eligible to bid.
