Odisha Slurry: Supreme Court approves Arcelor plan | The Financial Express

Odisha Slurry: Supreme Court approves Arcelor plan

The acquisition of the pipeline asset was financed by the lenders to OSPIL, including Srei. Most of the lenders to OSPIL were also lenders to Essar.

Odisha Slurry: Supreme Court approves Arcelor plan
A Bench led by Justice Ajay Rastogi dismissed the Srei Infrastructure Finance’s appeal, saying it lacks merit.

The Supreme Court on Thursday gave a thumbs up to ArcelorMittal’s resolution plan for Odisha Slurry Pipeline Infrastructure (OSPIL) as it dismissed Srei Infrastructure Finance’s appeal which alleged that the plan was discriminatory in the manner of distribution between the similarly situated creditors.

Srei further alleged that it being a secured financial creditor was being treated differently than other similarly situated creditors such as banks. A Bench led by Justice Ajay Rastogi dismissed the Srei Infrastructure Finance’s appeal, saying it lacks merit. OSPIL, which was set up as a wholly owned subsidiary of Essar and a 253-km pipeline from Dabuna to Paradeep in Odisha were transferred to OSPIL in February 2015 for a consideration of Rs 4,000 crore, free of encumbrance. The acquisition of the pipeline asset was financed by the lenders to OSPIL, including Srei. Most of the lenders to OSPIL were also lenders to Essar.

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The insolvency proceedings were initiated against OSPIL at the behest of IDBI Bank. The Arcelor resolution plan for OSPIL was approved by the CoC in December 2019 and the National Company Law Tribunal (NCLT), Cuttack bench, upheld the approval in March 2020.

Srei had challenged the order granting approval to ArcelorMittal’s resolution plan for OSPIL, which owns and operates a 253-km slurry pipeline. The pipeline is a critical ancillary unit of ArcelorMittal Nippon Steel India (erstwhile Essar Steel).Senior counsel Kapil Sibal, appearing for Srei, argued that Arcelor’s resolution plan suffered from infirmity on various grounds, including that it failed to maximise the value of the corporate debtor.

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Opposing the appeal, senior counsel Abhishek Manu Singhvi and counsel Ruby Singh Ahuja, arguing for AreclorMittal , submitted that the plan was approved by 100% of the committee of creditors (CoC) of OSPIL and got the due sanction of the NCLT as mandated under the IBC. They also highlighted that all the financial creditors of OSPIL, including SIFL, were given 100% of their principal amount claimed and verified by the resolution professional and the resolution plan had been in effect since July 2020 and thus, there can be no grievance whatsoever.

Challenging the dismissal of its appeal by the NCLAT, SREI Infra had questioned whether the revised RP of AMI deserved to be sanctioned on account of its failure to maximise the value of the assets of the corporate debtor. The NCLAT has “adopted a blinkered approach of not looking at the issues raised in their true perspective, simply relying on the fact that the RP of AMI was approved by 100% vote of the CoC of OSPIL and the commercial wisdom of the CoC is beyond the purview of judicial review”.

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First published on: 11-11-2022 at 07:36 IST