The Ruias, promoters of the Essar Steel, have thrown a last-minute googly in the bankruptcy case by making an offer to clear lenders' dues after nearly 14 months.
The Ruias, promoters of the Essar Steel, have thrown a googly in the bankruptcy case by making an offer to clear lenders’ dues after nearly 14 months. The Ruias are offering Rs 54,389 crore against the outstanding dues of Rs 49,000 crore to lenders in return for the withdrawal of the case from the Insolvency and Bankruptcy Code (IBC), TV news reports said.
The offer made by the Ruia family trumps the ArcelorMittal bid of Rs 50,000 crore. Notably, the Ruias can only be allowed to win back the ownership of Essar Steel if the IBC process is withdrawn as the Section 29A bars them from bidding for the company.
It is now up to the lenders to decide whether they want to go ahead with the Ruias’ offer by withdrawing from the IBC process, or want to continue with it and evaluate bids of other companies or want to give a chance to other companies to revise their offers.
Essar Steel was one of the twelve big NPA accounts identified by the Reserve Bank of India (RBI) for immediate resolution. The insolvency proceedings against the company began in August last year.
On October 4, the bid submitted by VTB-backed Numetal was declared ineligible by the Supreme Court as there was a “looming presence” of Rewant Ruia, the son of Essar Steel promoter Ravi Ruia, even as his stakes were bought by VTB.
Earlier, before the introduction of Section 29A in the IBC law, Essar Group, the parent company of Essar Steel, was found to be bidding for the debt-laden company. Following this development, the government brought in an Ordinance to bar wilful defaulters, defaulting promoters and related parties from acquiring other NPA accounts under the IBC process.