NCLT calls for speeding up Electrosteel Steels resolution process

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Kolkata | Published: March 27, 2018 5:47:52 AM

Datta informed Justice Jinan that the delay in the resolution proceeding was on account of complying with an order passed by this bench last Tuesday on Renaissance Steel’s petitions challenging the eligibility of Vedanta and Tata Steel to bid for Electrosteel Steels.

NCLT,  Electrosteel Steels,  Electrosteel Steels resolution plan,  Electrosteel Steels RPWith the moratorium period to prepare a resolution plan for Electrosteel Steels set to expire in the next three weeks, the Kolkata bench of the National Company Law Tribunal (NCLT) on Monday asked the resolution professional (RP) of the insolvent company to convene its committee of creditors’ (CoC) meet as early as possible to expedite the corporate insolvency resolution process. (Reuters)

With the moratorium period to prepare a resolution plan for Electrosteel Steels set to expire in the next three weeks, the Kolkata bench of the National Company Law Tribunal (NCLT) on Monday asked the resolution professional (RP) of the insolvent company to convene its committee of creditors’ (CoC) meet as early as possible to expedite the corporate insolvency resolution process. “You are expected to file the resolution plan on March 17, that means one month before the expiry of the moratorium period. Today is March 26… You have to expedite the process,” Justice Jinan KR told Siddhartha Datta, the counsel for Dhaivat Anjaria, the RP. For the debt-laden steel firm, the insolvency resolution process will expire on April 17.
Datta informed Justice Jinan that the delay in the resolution proceeding was on account of complying with an order passed by this bench last Tuesday on Renaissance Steel’s petitions challenging the eligibility of Vedanta and Tata Steel to bid for Electrosteel Steels.

On March 20, the Kolkata bench of the NCLT directed the RP to place all the objections of Renaissance Steel against its two rival bidders, Vedanta and Tata Steel, before the CoC for an “independent consideration” of the committee. Earlier, Abhishek Dalmia-led Renaissance Steel had moved the tribunal, asking it to prevent Anjaria from proceeding on further negotiations with Vedanta, the highest bidder, till the issue of eligibility of the Anil Agarwal-led company and Tata Steel was determined. Renaissance Steel had alleged that resolution applicants Vedanta and Tata Steel are not eligible to bid for the Kolkata-based insolvent steel maker as per Section 29A of the Insolvency and Bankruptcy Code (IBC).

In his order, Justice Jinan said, “A copy of the decision taken by the RP in respect of eligibility of resolution applicant Tata Steel and Vedanta as per Section 29A, with supporting reasons for taking the decisions is to be given to the applicant (Renaissance) within three days of date of this order with proper acknowledgement.”The applicants are allowed to submit their replies or further objections to the decisions taken by the RP within three days of the date of receipt of the copy of the decision,” the order added. Justice Jinan asked the RP to call the CoC meet as early as possible and expedite the resolution process. When contacted, Anjaria, a partner at PwC, declined to comment on the next meet of the committee of creditors (CoC).
“Exact date of the CoC meet will be decided soon.

It will be scheduled at the earliest. As per the order, in that meet, objections of Renaissance Steel against Vedanta and Tata Steel will be placed before the committee,” a source close to the development told FE. The bench asked the RP to submit the latest progress report before it. The next hearing of the case is scheduled on April 2. The resolution professional had received bids from Vedanta, Edelweiss Alternative Asset Advisors, Tata Steel and Renaissance Steel in January this year. On July 21 last year, the NCLT had admitted State Bank of India’s insolvency petition against Electrosteel Steels. The company, which owes lenders Rs 11,309 crore, had been referred to the bankruptcy court under Section 7 of the IBC following a nudge from the Reserve Bank of India (RBI).

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