Essar Steel case: NCLT rejects plea from 8 operational creditors

By: |
Updated: March 1, 2019 4:22:33 AM

Passing an oral judgement, the adjudicating authority comprising Justice Harihar Prakash Chaturvedi and Justice Manorama Kumari, passed a common order rejecting the interlocutory applications (IAs) of the OCs.

The said eight OCs included Orissa Stevedores, Kamaljeet Singh Ahluwalia and others, Signode India, Timken India, Hind Aluminium Industries, Arkay Logistics, Essar Bulk Terminals and others, and Allied Metallurgical Products.

The Ahmedabad Bench of the National Company Law Tribunal (NCLT) on Thursday rejected the petitions by eight of the operational creditors of distressed Essar Steel India (ESIL) who sought to consider ESIL promoters’ offer to settle entire debt over the resolution plan submitted by ArcelorMittal.

Passing an oral judgement, the adjudicating authority comprising Justice Harihar Prakash Chaturvedi and Justice Manorama Kumari, passed a common order rejecting the interlocutory applications (IAs) of the OCs. “The pleas by the listed eight OCs are dismissed and disposed off. Principal observations would be available in the detailed order which will follow later,” said the Bench.

The said eight OCs included Orissa Stevedores, Kamaljeet Singh Ahluwalia and others, Signode India, Timken India, Hind Aluminium Industries, Arkay Logistics, Essar Bulk Terminals and others, and Allied Metallurgical Products.

In a joint application filed by many other OCs including the aforementioned eight had objected to the ArcelorMittal’s Rs 42,000-crore resolution plan seeking to direct ESIL’s Committee of Creditors (CoC) to ensure full and equitable payment at par with financial creditors. In its resolution plan, ArcelorMittal had offered to settle total Rs 214 crore (mainly of the MSMEs), from the overall admitted claims of Rs 4,995 crore of the OCs. This would mean sizeable loss for the OCs.

On the other hand, ESIL promoters under Essar Steel Asia Holdings (ESAHL) offered to settle entire debt of Rs 54,550 crore, which includes full repayments to the OCs besides the financial creditors.

The lender, however, approved ArcelorMittal’s bid with a majority vote. The Tribunal in January rejected the ESAHL’s offer for the settlement.

For latest coverage on Maharashtra Assembly Election 2019 and Haryana Assembly Election 2019, log on to financialexpress.com. We bring you full coverage of Assembly Election 2019 on Financial Express, stay tuned for latest election updates.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.