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ArcelorMittal has given an ultimatum to Essar Steel’s lenders, asking them to approve its third bid for the stressed asset, or risk losing ₹7,000 crore that the LN Mittal firm had offered to settle the debts of former group firms Uttam Galva and KSS Petron.
The development comes even as the Supreme Court agreed on Wednesday to hear ArcelorMittal’s plea against a ruling of the National Company Law Appellate Tribunal (NCLAT).
Last Friday, ArcelorMittal was directed by NCLAT to pay within three days the loans that Uttam Galva and KSS Petron had defaulted on, so as to make itself eligible to bid for Essar Steel.
However, instead of settling its dues, ArcelorMittal revised its bid on Monday, effectively telling lenders to either accept the revised offer and declare it the winner, or risk a confrontation in the Supreme Court.
If ArcelorMittal were to choose the latter process, the lenders could miss out on the ₹7,000-crore repayment of money owed to them by Uttam Galva and KSS Petron. ArcelorMittal has contested the NCLAT order asking it to repay the debt on the grounds that it has already exited both companies. If the Supreme Court were to uphold its position then the lenders could lose out on settling the debt.
On Monday, ArcelorMittal had enhanced its bid to ₹42,000 crore from the earlier ₹33,000 crore and sought a direction from the Committee of Creditors on the mode of repayment of dues of the group companies.
A Bench of Chief Justice Dipak Misra and Justices AM Khanwilkar and DY Chandrachud agreed to hear the company’s plea on Wednesday.
The deadline set by NCLAT for paying up about ₹7,000 crore in dues ended on Tuesday, but the lenders will now wait for a ruling by the Supreme Court before proceeding.
ArcelorMittal’s rival contender for Essar Steel, the VTB Bank-backed Numetal, will also be involved in the hearing as it had filed a caveat in the Supreme Court last Friday.
The objective of the caveat was to ensure that the court does not pass an order without hearing Numetal’s argument in the case. Both the CoC and the Resolution Professional will also be served notices.
The NCLAT judgment pronounced on Friday also gave powers to the CoC to negotiate with the bidders to get the best value for the stressed asset. The financial creditors, led by SBI, are attempting to recover ₹49,000 crore through the insolvency proceedings against the bankrupt Essar Steel.
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