Essar Steel’s Bankruptcy Case Hearing Deferred Again: Reports

There seems to be no end to the delays in bankruptcy case of Essar Steel. Now as per the latest updates, Ahmedabad bench of NCLT (National Company Law Appellate Tribunal) has deferred its verdict on the resolution plan of Arcelor Mittal to 19 February and the subsequent hearing of NCLAT (National Company Law Appellate Tribunal) has been postponed to 28 February.

While earlier NCLT’s hearing was scheduled on 11 February and NCLAT’s subsequent hearing on 12 February, NCLT Ahmedabad has delayed its order.

Supreme Court rejects operational creditors’ plea

Apart from this, yesterday (Monday) Supreme Court has dismissed the petition by operational creditors of Essar Steel seeking a share in the resolution pie. There were more than 30 operational creditors who have objected to the committee of creditors (CoC) approving ArcelorMittal’s resolution plans because all their claims have not been fulfilled.

Meanwhile, Ruias, the original promoters of Essar Steel moved NCLAT against a previous NCLT order which dismissed their resolution plan. NCLT Ahmedabad in January had rejected Ruias’ INR 54,000-crore bid by calling it a “last minute entry”. Even though the Ruia family bid was supposed to take care of the operational creditors as well, Essar Steel’s CoC favoured ArcelorMittal’s bid of INR 42,000 crore.

SBI's loan auction receives a single bid

Last month, the lead lender of Essar Steel, SBI (State Bank of India) had put its entire loan amount to Essar Steel for auction and as per the reports, Bank of America Merrill Lynch emerged as the sole bidder.

However, it bid for only a part of the INR 13,000-crore loans the lender has put on the block. The investment bank has bid for about one-sixth of the loans that were up for sale and is said to have offered INR 1,300-1,500 crore. However, it is unclear whether SBI would accept the bid as there was no competition. The lender had said in the sale document that it might exercise the right not to go ahead with the sale at any stage.

Essar Steel has long been caught up in the IBC proceedings. With over INR 50,000 crore at stake, the company has been fought over by numerous bidders including Numetal, Vedanta group, JSW Steel Ltd and ArcelorMittal. However, after several rounds of bidding, only ArcelorMittal has remained in the game with its winning bid, whereas the Ruia family is trying to get the control back by topping up the offer.

source: SteelMint