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Public sector enterprises GAIL and Gujarat Energy Transmission Corporation have filed an interlocutory application in the National Company Law Tribunal seeking rejection of ArcelorMittal’s resolution plan for Essar Steel.
The companies have sought rejection of ArcelorMittal application approved by the Committee of Creditors to secure their cumulative claim of ₹952 crore. If the resolution plan is approved by NCLT, the operational creditors with over ₹1 lakh dues will not get any money back.
Separate cases filed
The public sector enterprises have filed separate cases against Satish Kumar Gupta, resolution professional of Essar Steel and State Bank of India, representing Committee of Creditors.
Along with the three petitions filed last week, operational creditors with dues of about ₹1,600 crore are opposing ArcelorMittal resolution plan.
In the case of Getco, which supplied power for Essar Steel, the overall claim was ₹827 crore and the resolution professional has approved just ₹1.
“The resolution plan is not in accordance with the provision of the IBC, 2016 and Insolvency Resolution Process for Corporate Persons Regulations, 2016 as it does not reflect the crystallised and legally adjudicated debt/liability of the corporate debtor,” Getco said in its petition seeking rejection of the plan.
GAIL in its application said it has a claim of ₹907 crore towards non-offtake of gas that it had signed for undertake or pay agreement. Of this, about ₹125 crore has been admitted in the list of creditors of the company.
“The resolution plan submitted is in contravention of Section 30 (2) of Insolvency and Bankruptcy Code 2016. That even otherwise resolution plan is neither legal nor proper in the interest of all creditors,” it said. The petition termed the ArcelorMittal resolution plan “arbitrary, irrational, illogical that puts in jeopardy the interest of operational creditors.”
OC’s claim
Last week, three applications by operational creditors were filed against the Committee of Creditors for approving ArcelorMittal’s resolution plan. About 29 operational creditors have come together to secure their claim of ₹360 crore. Other operational creditors Arkay Logistics and Orissa Stevedores that had an exposure of ₹227 crore and ₹20 crore, respectively, also filed petitions in NCLT.
ArcelorMittal has offered to pay ₹214 crore to operational creditors against total admitted claim of ₹4,995 crore. Its resolution plan includes an upfront payment of ₹42,000 crore against the overall admitted financial claim of ₹54,549 crore. The resolution professional has rejected claim worth ₹14,727 crore. ArcelorMittal will infuse another ₹8,000 crore into Essar Steel to support operational improvement.
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