Essar Steel auction: SC gives ArcelorMittal, NuMetal 2 weeks to clear dues

The time lost in dealing with insolvency cases at the apex court and NCLT shall be excluded from the mandatory 270-day resolution period

The Supreme Court on Thursday decided to give one more opportunity to ArcelorMittal and NuMetal to bid for Essar Steel, but only if they both paid off their non-performing dues within two weeks. The court considered the plea of the Committee of Creditors that assets of Essar Steel should not be liquidated and a fresh opportunity should be given to both companies in the fray. 

Now, the Supreme Court said, the Committee of Creditors would take a decision within eight weeks on NuMetal and ArcelorMittal’s rival bids for Essar Steel. If, however, nothing materialises within eight weeks, Essar Steel shall go into liquidation, the court said.

The Court also said that the time lost in dealing with insolvency cases at the apex court and the National Company Law Tribunal (NCLT) shall be excluded from the mandatory 270-day resolution period. 

The following is the chronology of events of insolvency proceedings against Essar Steel leading to the Supreme Court on Thursday granting one more opportunity to mining major ArcelorMittal and Russia's VTB Capital-backed NuMetal to bid for the firm after clearing their Non-Performing Asset (NPA) dues in two weeks:

*May 5, 2017:Banking Regulation (Amendment) Ordinance takes effect, authorising RBI to proceed with bankruptcy process which allowed banks to take action against defaulters.

*Jun 27:Insolvency proceedings initiated against Essar Steel in National Company Law Tribunal (NCLT) after RBI identifies 12 accounts for immediate resolution under Insolvency and Bankruptcy Code (IBC).

*Jul 4: Essar Steel challenges RBI's decision in Gujarat High Court.

*Jul 7: HC restrains NCLT from further proceedings against Essar Steel.

*Jul 17: HC dismisses Essar Steel's plea.

*Jul 18: Essar Steel seeks time in NCLT Ahmedabad to file objections.

*Aug 2: NCLT admits plea for insolvency proceedings against Essar Steel.

*Oct 2: Expression Of Interests (EOIs) invited for Essar Steel.

*Oct 28: Six firms submit EOIs-- ArcelorMittal, Numetal, Nippon & Sumitomo Metal, Tata Steel, Vedanta Group, SAIL.

*Nov 23: Section 29A introduced which bars wilful defaulter, defaulter promoters from bidding.

*Feb 12, 2018: NuMetal, ArcelorMittal submit bids.

*Mar 21: Both bids held ineligible due to NuMetal's connection with Essar Group's Ruias and ArcelorMittal's stake in an NPA account.

*Mar 20: Numetal moves NCLT challenging the rejection.

*Mar 26: ArcelorMittal challenges disqualification in NCLT.

*Apr 2: Second round of bids invited.

*Apr 19: NCLT asks Committee of Creditors (CoC) to reconsider first round of bids.

*Apr 26: Numetal, ArcelorMittal move National Company Law Appellate Tribunal (NCLAT) against the disqualification of first round of bids.

*Sep 7: NCLAT holds Numetal's Rs 370.00 billion in second-round bid valid, asks ArcelorMittal to clear dues of Uttam Galva and KSS Petron, worth Rs 70.00 billion in three days.

*Sep 10: ArcelorMittal moves SC against NCLAT order.

*Sep 12: ArcelorMittal tells SC it had already divested its shares in Uttam Galva Steel and KSS Petron.

*Sep 20: NuMetal tells SC NCLAT wrongly allowed ArcelorMittal to pay dues after bidding.

*Sep 27:SC reserves verdict.

*Oct 4: SC allows ArcelorMittal, NuMetal to bid for Essar Steel; asks CoC to decide the issue within eight weeks.