The National Company Law Appellate Tribunal on Thursday approved steel tycoon Lakshmi Mittal-led ArcelorMittal’s ₹42,000-crore bid for the acquisition of bankrupt Essar Steel.
Resolution plan tweaked
The tribunal, however, modified the Resolution Plan submitted by ArcelorMittal to safeguard the rights of the operational creditors and other financial creditors of Essar Steel. It said the proceeds of the sale were to be shared among the creditors.
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A Corporate Insolvency Resolution Process was initiated in 2017 against debt-ridden Essar Steel Limited to recover ₹54,547 crore of unpaid dues to financial lenders and operational creditors. The tribunal also clarified that any profits of Essar Steel generated during the pendency of the insolvency proceedings would also be distributed among the creditors on a pro rata basis.
It said the profit cannot be given to the successful resolution applicant ArcelorMittal as it had not invested any money during the insolvency process.
The tribunal also rejected the application by Prashant Ruia, the promoter, and Essar Steel Asia Holdings Limited, challenging the eligibility of ArcelorMittal as a bidder.
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“An issue which has been settled by the Supreme Court i.e., eligibility of ArcelorMittal India Pvt. Ltd. as a resolution applicant for Essar Steel India Ltd., cannot be re-agitated again and again,” the tribunal headed by Justice S.J. Mukhopadhaya said.
Mr. Ruia had challenged the March 8, 2019 order of the Ahmedabad Bench of the National Company Law Tribunal approving ArcelorMittal’s bid for the takeover of Essar Steel.
He had contested ArcelorMittal’s eligibility on the ground that it had suppressed facts by stating that Mr. Lakshmi Mittal had completely exited from the Indian businesses of the Mittal family, more specifically, Gontermann Peipers India Ltd., GPI Textiles Ltd., and Balasore Alloys Ltd.
ArcelorMittal had argued that it was a mala fide attempt to derail the corporate insolvency resolution process. It also submitted that Mr. Ruia had no locus standi as his settlement plan was disallowed.