Stocks

ArcelorMittal informs Essar Steel investors about cancellation of their holding in company

Suresh P Iyengar Mumbai | Updated on January 02, 2020 Published on January 02, 2020

The shattered investors of Essar Steel had finally received the communication from ArcelorMittal Nippon Steel Company through their brokers stating that their holding has been cancelled as per the insolvency resolution plan approved by the Supreme Court.

Earlier, investors had expressed their shock when they found that the shares suddenly went missing from their demat account without any intimation.

"While banks have made a big achievement by burning Rs 7,000 crore to settle its outstanding Essar Steel loan of Rs 49,000 crore for Rs 42,000 crore, the poor small investors and operational creditors are left in lurch," said an investor with 200 shares of Essar Steel.

In the contrary, wealthy corporates have designed a business model by buying stressed asset at a throw away price from banks and make a killing when the loans are settled, he added. In fact, State Bank of India (SBI) last February had put its outstanding Essar Steel loan of Rs 15,431 crore on auction but had to shelve it. About 10 per cent of Essar Steel shares were held by small investors even after the company had made an open offer for de-listing the shares as the offer price then was very low.

In an e-mail statement to investors, Pankaj S Chourasia, Company Secretary, Essar Steel India said in connection with the corporate insolvency resolution process of Essar Steel India, the resolution plan submitted by ArcelorMittal India has been approved by the Supreme Court through its judgment dated November 15, 2019, after considering the judgment of the National Company Law Tribunal (NCLT), Ahmedabad and National Company Law Appellate Tribunal (NCLAT).

Section X, Part B of the Resolution Plan provides for the capital reduction of the entire existing issued, subscribed and paid-up share capital (both equity and preference) of the company held by the existing promoters and public shareholders such that ArcelorMittal India (along with its nominee shareholders) will be the sole shareholder of the company.

Accordingly, it said the entire existing issued, subscribed and paid-up share capital (both equity and preference) of the company stood cancelled and extinguished with effect from December 16, 2019.Pursuant to such capital reduction and cancellation, the shares of the company held by investors have been debited from demat account, it added.

Shares certificates held in physical form will also be not valid henceforth, it said.

Published on January 02, 2020

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.