The entire payment was being made on Wednesday, an Arcelor spokesperson clarified. The CoC meeting on Wednesday was inconclusive and the lenders decided to meet again on Friday.
Around 80 per cent of the Rs 74.69 billion would go towards meeting the dues of Uttam Galva. The balance would be for KSS Petron.
In a statement, ArcelorMittal said its board believes that Essar Steel represents a unique and compelling opportunity for the company to establish a significant footprint, with substantial expansion potential, in the high-growth Indian steel market. It concluded that, given the significant benefits that Essar Steel would bring to ArcelorMittal, making this payment was an appropriate course of action under the circumstances.
As stipulated in the SC ruling, Essar’s CoC now has eight weeks to accept what it considers to be the best resolution plan from eligible applicants, it said.
On October 11, ArcelorMittal had written to Essar’s lenders expressing its intent pay the dues of Uttam Galva and KSS Petron and calculated the dues of the companies at Rs 45 billion, as per the letter. The calculation was based on the loan amount, including interest up to February 7 for Uttam Galva and February 9 for KSS Petron.
On February 7, ArcelorMittal had sold the shares of Uttam Galva, and on February 9, Fraseli, a company ArcelorMittal promoter L N Mittal owned and managed, sold its shares in KSS Global, the parent company of KSS Petron, to become eligible for Essar.
Both Uttam Galva and KSS Petron had been classified as non-performing assets (NPAs) for more than a year, which made ArcelorMittal ineligible to bid for Essar Steel under the Insolvency and Bankruptcy Code (IBC). Under the IBC, a promoter of an insolvent company is not eligible to bid for another insolvent company.
The letter to the CoC had mentioned that it was subject to approval from the board of ArcelorMittal. In line with it, the board today approved the amount.
On October 4, the SC gave time to ArcelorMittal and Numetal, under Article 142 of the Constitution, to clear NPA dues to be eligible to bid for Essar Steel. The deadline for payment is October 18.
After the NCLAT order, ArcelorMittal had revised its offer to Essar to Rs 420 billion. During the hearing, Numetal had said that it would match it.
However, Numetal would first have to clear its dues to become eligible. Numetal did not respond to Business Standard’s query on whether it was clearing the dues.
VTB Bank, which was a shareholder of Numetal, has moved the Supreme Court to bid for Essar Steel on its own and is seeking SC clarification on its solo bid. Numetal was found ineligible to bid for Essar Steel as its co-promoter, a trust where Ravi Ruia's son Rewant Ruia is the beneficiary, had 25 per cent stake in Numetal in the first bid.
In the second round, Vedanta also entered the fray and had made a bid of around Rs 350 billion. JSW Steel, which is also keen to bid for Essar Steel solo, is seeking legal opinion. It is an investor in a step-down subsidiary of Numetal.
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 "ArcelorMittal to pay Rs 74.69 bn to creditors of Uttam Galva, KSS Petron")