Essar Steel was among the 12 companies referred by the RBI for insolvency proceedings.
State Bank of India and the committee of creditors (CoC) of embattled Essar Steel on Monday moved the Supreme Court against the National Company Law Appellate Tribunal’s (NCLAT) suggestion that CoC reconsider distribution of ArcelorMittal’s bid of Rs 42,000 crore between financial and operational creditors.
The SBI has also specifically opposed the appellate tribunal’s recommendation to give Standard Chartered Bank (SCB) a higher amount than under the approved ArcelorMittal resolution plan, arguing that the private bank, being not a secured creditor, is not eligible to make any additional claim.
The NCLAT has directed lenders to consider a larger payout to SCB, which had made the highest claim of around `3,500 crore among unsecured creditors, against `61 crore or 1.7% of the admitted claims, as approved by the CoC.
The SBI said the NCLAT cannot pressurise the lenders to pay unsecured creditors more than they are inclined to.
While the CoC on Saturday agreed to give another `1,000 crore to operational creditors against `196 crore repayment decided earlier, it had rejected SCB’s extra claim.
The appellate tribunal while refusing to stay the NCLT-Ahmedabad order approving ArcelorMittal’s bid to take over Essar Steel had directed lenders to jointly consider redistribution of `42,000 crore as per the tribunal’s March 8 order, which had suggested a 85:15 distribution between the financial and operational creditors against the 90:10 ratio as proposed in the resolution plan.
While advising the CoC and resolution professional (RP) to consider a judicious distribution of ArcelorMittal’s bid amount among financial creditors and other stakeholders, the NCLT had further suggested that `6,300 crore be distributed among operational creditors and other stakeholders, who were not to receive anything under the CoC-approved plan.
Essar Steel was among the 12 companies referred by the RBI for insolvency proceedings. The total claims admitted by the financial creditors in Essar Steel are `49,479 crore.
The operational creditors and SCB had last month opposed the ArcelorMittal’s resolution plan on grounds of “unfair distribution”. But SBI had contested SCB’s higher claim, saying the bank is not a secured creditor as its loan was not to Essar Steel directly but to a promoter entity — Essar Steel Offshore.