The meeting of the committee of creditors (CoC) of Essar Steel to vote on the letter that is to be sent to Numetal and ArcelorMittal asking them to rectify their bids is likely to be delayed by at least two days.
The meeting of the committee of creditors (CoC) of Essar Steel to vote on the letter that is to be sent to Numetal and ArcelorMittal asking them to rectify their bids is likely to be delayed by at least two days, bankers with knowledge of the development told FE. While earlier it was expected that the vote would start on Monday, bankers said it is now likely to happen towards the end of the week, since the they are yet to reach a consensus on the issue.
“All the members of the CoC will have to approve the letter through a vote before it is sent to the two bidders. Once the letter is sent to them, they will be given 7 days time to rectify their bids,” a banker said.
Another banker said there is a possibility that the vote could be delayed beyond two days. Numetal and ArcelorMittal are likely to take a decision on their next course of action only after they receive the letter from the CoC, sources said.
ArcelorMittal has maintained that the company was never the promoter of Uttam Galva Steels and is, therefore, an eligible bidder for Essar Steel under the Insolvency and Bankruptcy Code (IBC). LN Mittal, chairman and CEO of ArcelorMittal, recently said his firm would continue to engage with the CoC on the issue of eligibility.
In its April 19 order, the Ahmedabad bench of the NCLT had asked Essar Steel’s CoC and RP to reconsider the first set of bids received from Numetal and ArcelorMittal, granting an additional 30 days for the resolution process. It had suggested that the two bidders be allowed an opportunity to rectify their bids to make them eligible.
The RP and the CoC had disqualified ArcelorMittal’s bid since it was considered a promoter of Uttam Galva Steels and KSS Petron — both loan defaulters. Numetal’s bid was held to be ineligible since one of the persons associated with the company, Rewant Ruia, is related to the promoters of Essar Steel. The shareholders of Numetal include Russia’s VTB Bank and engineering firm Tyazhpromexport, financial investor Aurora Enterprises (in which Ruia has an interest) and commodity trading company Indo International Trading. Numetal has maintained it is open to a change in the shareholding of the company, if required.
Since then, both ArcelorMittal and Numetal have moved the NCLAT. While ArcelorMittal has challenged the disqualification of its bids by the RP and the CoC, Numetal has challenged the NCLT’s order. The NCLAT said it would hear both the appeals on May 17.