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The Ahmedabad Bench of the National Company Law Tribunal (NCLT) on Thursday rejected the petitions of eight operational creditors (OCs) of distressed Essar Steel India Ltd (ESIL), who sought that the ESIL promoters’ offer to settle their entire debt be considered, as opposed to the resolution plan submitted by ArcelorMittal which offered full settlement only financial creditors.
Passing an oral judgment here, the adjudicating authority, comprising Justices Harihar Prakash Chaturvedi and Manorama Kumari, passed a common order rejecting the interlocutory applications of the OCs. “The pleas by the listed eight OCs are dismissed and disposed of. The principal observations would be available in the detailed order which will follow later,” said the Bench.
The eight OCs are Orissa Stevedores Ltd, Kamaljeet Singh Ahluwalia and others, Signode India, Timken India, Hind Aluminium Industries, Arkay Logistics, Essar Bulk Terminals and others, and Allied Metallurgical Products.
In a joint application, several OCs including the above eight had objected to ArcelorMittal’s ₹42,000-crore resolution plan. seeking to direct ESIL’s Committee of Creditors (CoC) to ensure full and equitable payment at par with financial creditors. In its resolution plan, ArcelorMittal had offered to settle ₹214 crore (mainly of the MSMEs), against the overall admitted claims of ₹4,995 crore of the OCs. This would mean a sizeable loss for the OCs.
On the other hand, ESIL promoters, under Essar Steel Asia Holdings Ltd (ESAHL), had offered to settle the entire debt of ₹54,550 crore, which includes full repayments to the OCs besides the financial creditors.
The CoC, however, approved ArcelorMittal’s bid with a majority vote. The NCLT, in January, had rejected ESAHL’s offer for settlement.
The National Company Law Appellate Tribunal (NCLAT) has extended the deadline for the Ahmedabad Bench of the NCLT to decide on ArcelorMittal’s resolution plan to March 8.
Earlier, NCLAT had set February 28 as the deadline for the NCLT to deliver its final order in the case, following which the appellate tribunal was to take over, from March 1.
The two-member NCLAT Bench headed by Justice SJ MukhopadhayaIn said if NCLT fails to deliver the verdict by March 8, it will call for all details and pass the verdict itself.
NCLAT has listed the next hearing in the case for March 13.
The Essar Steel resolution under the Insolvency and Bankruptcy Code (IBC) has been going on for over 580 days, crossing all the deadlines stipulated by the Code.
State Bank of India and Standard Chartered Bank had filed an insolvency case against Essar Steel in August 2017.
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