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The Ahmedabad Bench of the National Company Law Tribunal (NCLT) on Thursday asked the Resolution Professional and the Committee of Creditors (CoC) to re-examine the bids for the Ruias-promoted Essar Steel India Ltd (ESIL) submitted in the first round by ArcelorMittal India and Numetal Mauritius.
The RP and the CoC led by State Bank of India had in March 2018 rejected the bids by global steel giant LN Mittal-led ArcelorMittal and Russian VTB Bank subsidiary Numetal, the only companies to submit a resolution plan.
However, the the two-member Bench comprising Harihar Prakash Chaturvedi and Manorama Kumari has asked for a review of the bids, noting that Essar Steel’s CoC and the RP, Satish Kumar Gupta from Alvarez & Marsal India, “omitted to follow procedures” laid out under sections 29(A)(c) and 30(4) of Insolvency and Bankruptcy Code (IBC).
The Bench also extended the deadline for the insolvency process by a month from the original deadline of April 29.
According to sources, the RP will now have to either reconsider the bids or go in appeal before the National Company Law Appellate Tribunal (NCLAT).
The NCLT Bench ruling is seen as an ouster of Anil Agarwal-promoted Vedanta and JSW, which partnered with Numetal in a step-down subsidiary, Nu Metal & Steel Pvt Ltd.
The Bench observed that the RP and the CoC did not give Numetal and ArcelorMittal enough time to rectify their grounds for disqualification.
“The RP and CoC’s decision to hold second round of bids may sound prudent but is not legally sound,” the Bench ruled.
An ArcelorMittal statement, issued after the judgement on Thursday, said: “We have always maintained that we are eligible to bid for Essar Steel and are pleased to see that the NCLT wants our offer to be presented to the committee of creditors... We had made a strong and competitive offer, backed up by a detailed industrial plan, and now hope for a swift resolution for Essar Steel.”
A Numetal spokesperson said, “We have put forth a very compelling resolution plan. We hope our proposal will be considered by the Committee of Creditors.”
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