Resolution process can’t move till the appellate tribunal disposes of a plea by RSIPL, challenging the approval of Vedanta’s Rs 5,320-crore bid.
The National Company Law Appellate Tribunal (NCLAT) on Tuesday ordered that status quo be maintained with regard to the implementation of Anil Agarwal-promoted Vedanta’s resolution plan for Electrosteel Steels. This means the resolution process can’t move till the appellate tribunal disposes of a plea by Renaissance Steel India Private Ltd (RSIPL), challenging the NCLT-Kolkata’s April 17 order that approved Vedanta’s Rs 5,320-crore bid to acquire the bankrupt steelmaker. The Abhishek Dalmia-promoted RSIPL had bid for the troubled steelmaker unsuccessfully.
According to sources, the NCLAT directed the committee of creditors of Electrosteel Steels to submit the evaluation criteria and comparative chart showing the score matrix done by the lenders for the top three bidders — Vedanta, Tata Steel and RSIPL. The NCLT had quashed RSIPL’s objections on Vedanta’s eligibility under section 29 A of the Insolvency and Bankruptcy Code and approved Vedanta’s offer.
“NCLAT has directed RP/CoC to prepare and submit a comparative statement of monetary offer given by the top three bidders,” Sumant Batra, counsel appearing on behalf of RSIPL told FE, adding that the appellate tribunal has agreed to hear the matter and posted it for further hearing on May 17.
NCLAT also directed Electrosteel’s existing steering committee, comprises one representative each of SBI, PNB and Canara Bank and two of Vedanta, not to spend any amount except as required for day to day operations of the business of Electrosteel Steels and issued notices to Vedanta Ltd, the CoC and the resolution professional and asked them to reply within ten days.
Of Vedanta offer of Rs 5,320 crore for the bankrupt steelmaker, Rs 1,805 crore would be used to subscribe to the company’s equity while Rs 3,515 crore would be provided by “way of debt”. The entire amount, Vedanta has earlier said, would be used to pay financial creditors. This implies the lenders are taking a fairly large haircut of 60% given the company’s outstanding debt is Rs 13,175.15 crore.
Electrosteel Steels is one of the top 12 distressed companies listed by Reserve Bank of India (RBI) in June last year.