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The National Company Law Appellate Tribunal (NCLAT) on Friday refused to stay a bankruptcy court order approving steel giant ArcelorMittal’s ₹42,000-crore takeover bid for Essar Steel and sought a fresh plan for the distribution of bid amount between financial and operational creditors of the debt-laden firm.
Essar Steel directors had challenged the Ahmedabad Bench of the National Company Law Tribunal’s (NCLT) nod to global steel giant ArcelorMittal SA’s bid for the company on the plea that their own offer of ₹54,389 crore was superior, as it would clear 100 per cent outstanding of both financial and operational creditors.
Standard Chartered, too, moved the NCLAT against the plan as its counsel contended that the bank was being given only 1.7 per cent of its total dues from Essar Steel while other financial creditors, forming part of the committee of creditors (CoC), were getting over 85 per cent of their dues.
A two-member Bench headed by Justice SJ Mukhopadhaya refused to stay the NCLT nod to ArcelorMittal’s resolution plan and posted the matter for March 18.
No discrimination
It also asked the SBI-led CoC to bring a fresh distribution plan at the next date of hearing, saying “there cannot be any discrimination... all are equal”.
The NCLAT suggested that all operational creditors below ₹1 crore be given 100 per cent of their dues, as should the employees of Essar Steel. Only 90 per cent of ₹42,000 crore should be allowed for financial creditors.
ArcelorMittal’s resolution proposal involves financial creditors getting ₹41,987 crore out of their total dues of ₹49,395 crore. Operational creditors, under the plan, would get just ₹214 crore against the outstanding of ₹4,976 crore.
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