Essar steel insolvency: Ruias offer to pay Rs 543.89 bn to creditors

The offer is for full settlement of claims of financial creditors, operational creditors and staff

Promoter Ruias of embattled Essar Steel Thursday offered to pay an aggregate of Rs 543.89 billion including Rs 475.07 billion upfront cash payment to clear all dues owned to lenders so that the company can be pulled out of insolvency proceedings.

The proposal was made as the Committee of Essar Steel Creditors voted on a takeover offer made by the world's largest steel maker ArcelorMittal.

"The shareholders of Essar Steel have today (Thursday) submitted a proposal to the Committee of Creditors (CoC) for full settlement of the entire admitted claims of the financial creditors, operational creditors, and workmen and employees of Essar Steel India Ltd (ESIL), aggregating Rs 543.89 billion, under Section 12A of the Insolvency and Bankruptcy Code," the group said in a statement.

The plan includes an upfront cash payment of Rs 475.07 billion to all creditors, including Rs 455.59 billion to the senior secured financial creditors. This would mean the secured financial creditors make full recovery of their dues.

"The CoC is empowered to consider and approve this Settlement Plan with the requisite voting share, on the basis of which the corporate insolvency resolution process against ESIL may be withdrawn," the statement said.