Essar case: Apex court asks ArcelorMittal not to deposit bid amount

Our Bureau Mumbai | Updated on April 12, 2019 Published on April 12, 2019

NCLAT told to decide on pending appeals expeditiously

The Supreme Court has ordered status quo in the long-drawn Essar Steel insolvency case and directed the winning bidder ArcelorMittal not to deposit the bid amount of ₹42,000 crore.

Hearing a petition filed by the committee of creditors (CoC) and operational creditors, the two-member Bench headed by Justice Rohinton F Nariman directed the National Company Law Appellate Tribunal (NCLAT) to decide on the pending appeals in the case expeditiously.

In a hearing that lasted for a few minutes, the apex court told ArcelorMittal not to deposit any money in the lenders’ account towards settlement in the case.

The decision of the Supreme Court would further delay ArcelorMittal’s plan to gain a foothold in the fast-growing Indian steel industry.

Interestingly, in its hearing on Tuesday, the NCLAT had directed ArcelorMittal to deposit the bid amount into a separate account either with NCLT, Ahmedabad or the Tribunal. The next hearing in the case is scheduled for April 23.

The two-member Bench of NCLAT headed by chairman Justice SJ Mukhopadhaya also directed ArcelorMittal to file an affidavit with details on the steps it is taking to implement the approved resolution plan for the revival of Essar Steel.

Agreeing to bring in the money as committed, ArcelorMittal claimed there is reluctance on the part of the lenders to execute the debt assignment agreement. The money cannot be deposited without assignment of debt in favour of the company, ArcelorMittal had said.

While approving ArcelorMittal’s winning bid, NCLT late last month told the committee of creditors to consider a higher payment for the operational creditors and evaluate the option of treating Standard Chartered Bank as a secured financial creditor.

Following this, the CoC had increased the allocation for operational creditors to ₹1,000 crore from ₹200 crore but refused to consider Standard Chartered Bank as a financial creditor, which would have resulted in a higher payout for the UK-headquartered bank.

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Published on April 12, 2019
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