Just nine months after the Reserve Bank of India (RBI) released the first list of big corporate defaulter the ‘Dirty Dozen’ for immediate resolution under the newly-adopted Insolvency and Bankruptcy (IBC), it has received its first success. Vedanta, which won the bid for bankrupt Electrosteel Steels, got the final nod from National Company Law Tribunal (NCLT) closing the deal successfully.
Vedanta informed stock exchanges that it was declared “successful resolution applicant” under the insolvency process and had received the Letter of Intent. The NCLT Kolkata bench on Monday approved Vedanta Ltd’s resolution plan for the insolvent Electrosteel Steels Ltd, IANS reported.
On March 30, Vedanta has declared the highest bidder for Electrosteel Steels, which has a loan default of Rs 10,273 crore. With the deal being sealed, Vedanta is the new owner of Electrosteel Steels. It is notable that the resolution process for Electrosteel Steels has completed before the 270-day deadline of the IBC.
Vedanta has won the ownership of Electrosteel Steels despite Renaissance Steel questioning the eligibility of Vedanta Limited under Section 29A of the IBC, which bars bidders guilty of criminal misconduct punishable by two or more years in jail. However, Electrosteel Steels’ Committee of Creditors (CoC) led by State Bank of India had rejected Renaissance Steel’s claims, and submitted in NCLT the resolution plan by Vedanta.
While Tata Steel was the first one to become a first successful bidder under the IBC process for bankrupt Bhushan Steel, which was also a part of Dirty Dozen, the Vendata got the final approval from the insolvency court first.