Battle for Essar Steel: After NuMetal approached the NCLAT in connection with the eligibility criteria for Essar Steel, the tribunal has agreed to hear the case on May 17.
Battle for Essar Steel: After NuMetal approached the NCLAT in connection with the eligibility criteria for Essar Steel, the tribunal has agreed to hear the case on May 17. NuMetal had approached the NCLAT ahead of the CoC (Committee of Creditors) meeting on Friday. The NCLAT is slated to hear the case on May 17. The body has issued notices to a committee of Essar Steel creditors, the resolution professional running an auction of the company and the two bidders on the cross petitions, PTI reported.
Interestingly, this is likely to heat up the already intense battle as Russia’s VTB Capital-backed NuMetal has challenged a lower company court order allowing rival ArcelorMittal to clear bank dues of associate companies so that it can become eligible for acquisition of Essar Steel. In response, Lakshmi Mittal run-ArcelorMittal on has challenged its disqualification from bidding for Essar Steel. This development comes in even as Essar Steel’s CoC (Committee of Creditors) are slated to meet to call for fresh bids.
According to media reports, Numetal has increased its offer for by more than 75% to match ArcelorMittal’s superior bid in the first round, said two persons familiar with the matter. In a letter to lenders, Numetal has reportedly said it would now offer Rs 32,000 crore for the bankrupt steel company.
NuMetal’s contention in the case is that the Ahmedabad-bench of NCLT had disqualified Arcelor Mittal India from bidding to acquire Essar Steel as it was a promoter company of firms that had defaulted on payment of bank loans. According to PTI, NuMetal said in the petition that NCLT had, however, “erred” in permitting ArcelorMittal India Ltd “to cure the ineligibility by making payment of the overdue amounts of Uttam Galva and KSS Petron” within 30 days. Further, Numetal maintains that allowing ArcelorMittal to clear dues after the government has framed legislation, is in violation of law.
Notably, was referred to NCLT in June last year. At that time, the company had a total debt of Rs 49,000 crore. Meanwhile, ArcelorMittal has challenged the petition saying that it had exited Uttam Galva before submitting a bid for Essar Steel on February 12 itself.