ArcelorMittal, JSW Steel and Essar Steel continue slugfest over Essar bid

Steel titans ArcelorMittal, JSW Steel and Essar Steel took turns in taking swipes at each other as the battle for the insolvent Essar rages.
 
Statements and tweets appeared to be the theme of the day as Essar Steel said in a statement, the proposal made by Essar Steel shareholders provides for payment of a total of Rs 54,389 crore to various creditors, which exceeds the resolution plan currently approved by the creditors by more than Rs 12,000 crore.
 
“This proposal has been submitted under the recently introduced Section 12A of the Insolvency and Bankruptcy Code (IBC). Under the proposal made by the shareholders, all classes of creditors would receive full recovery of their claims,” it said.
 
Essar’s statement comes a day after Sajjan Jindal’s interview in Davos to BloombergQuint in which he backed the settlement proposal made by the promoter family. It had prompted a sharp reaction from ArcelorMittal on Tuesday which had said it appeared that certain parties in India would not like the IBC to be implemented according to law.
 
Jindal had said that even if Ruia’s offer was in conflict with the bankruptcy law’s provisions, it would be a crucial decision for any judicial system to overlook Rs 12,000 crore of public money coming back.
 
Jindal’s comments came at a time when ArcelorMittal’s offer of Rs 42,000 crore for Essar had been filed with the National Company Law Tribunal (NCLT) for approval.

 
Essar on Wednesday said that under the provisions of the IBC, a proposal made under Section 12A is to be decided between the creditors of Essar Steel and the company. Creditors have already been provided all relevant information on the proposal.
 
Section 12A allows withdrawal from the Corporate Insolvency Resolution Process (CIRP) with the consent of 90 per cent of the lenders. 
 
“No request has been received from the committee of creditors of Essar Steel regarding any further information that they need in this regard. There is no requirement to provide any such details to a resolution applicant. It is therefore surprising to note the comments made to the media by a resolution applicant regarding not having received the details of the proposal,” the statement read.
 
Arcelor had suggested on Tuesday that no details of the financing offer, which was made at the last minute, were made available.
 
“The overriding objective of the IBC is maximisation of recovery for creditors and this has been established time and again by courts at all levels. Creditors of Essar Steel, including operational creditors, should not be forced to accept a resolution plan which undervalues the firm and its assets.”
 
ArcelorMittal, however, preferred to keep the war of words going with the largest producer in the domestic market and highlighted the seeming inconsistencies in Sajjan Jindal’s stand. It tweeted: In March 2018, M. Sajjan Jindal, CEO of JSW Steel, said, “In the spirit of the law, it is not fair to allow promoters of a defaulting company to participate. I will be surprised if that is permitted.”
 
Seshagiri Rao, joint managing director and group chief financial officer, JSW Steel group, refuted any inconsistencies in Jindal’s stand. He said that when Jindals said that promoters should not be allowed to participate, they were trying to get the company at a discount on the defaulted amount that they were supposed to pay fully. “Today, they are paying 100 per cent money. There is no inconsistency,” said Rao.