Insolvency proceedings: Tribunal seeks Electrosteel Steels bid details

The National Company Law Appellate Tribunal (NCLAT) today ordered the lenders of Electrosteel Steels to submit evaluation criteria and comparative charts showing the score matrix done by it of the top three bidders in insolvency resolution proceedings. 

In addition, the tribunal has asked the resolution professional and the committee of creditors to submit statements of offers made by the top three bidders for the beleaguered Electrosteel Steel. 

It stated that the matter would be heard on May 17 and ordered the parties to maintain status quo on the resolution plan submitted by Vedanta. This follows Renaissance Steel’s appeal in the tribunal that questions, under the Section 29 A of the Insolvency and Bankruptcy Act, Vedanta’s eligibility to bid for Electrosteel Steels.  Renaissance Steel also says its bid amount for Electrosteels Steel is higher than that of Vedanta. 

The appeal came after the Kolkata Bench of the National Company Law Tribunal (NCLT) rejected Renaissance Steel’s application contesting Vedanta’s participation in the bidding process.  Electrosteel Steels is one of 12 corporate loan defaulters referred by the Reserve Bank of India for insolvency resolution in June 2017. The company owes lenders Rs 133.95 billion.

The Kolkata Bench of the NCLT approved Vedanta’s Rs 53.20 billion resolution plan for Electrosteel Steels.  Apart from Vedanta, Tata Steel, Renaissance Steel, Edelweiss Asset Reconstruction had also submitted resolution plans. 

Electrosteel Steels’ moratorium period was to end in April. The resolution professional had sought an extension when it could not complete insolvency resolution within the mandated 180 days. 

Apart from Electrosteel Steels, Essar Steel, Bhushan Power & Steel and Bhushan Steel are some steel companies facing litigation over insolvency resolution. The Jaypee Infratech case is being heard in the Supreme Court after homebuyers sought a say in its resolution process.