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Essar Steel operational creditors to move NCLT to seek Rs 50 bn of dues

ArcelorMittal, which has emerged the highest bidder for the company, has not included operational creditors in its debt resolution plan submitted to the committee of creditors

Dev Chatterjee & Shine Jacob  |  Mumbai 

Essar Steel
Essar Steel

The stage is set for another round of legal battle, with operational creditors of planning to move the (NCLT) this week, seeking Rs 49.95-billion dues from the company. The operational creditors include several central- and state-owned government entities.

ArcelorMittal, which has emerged the highest bidder for the company, has not included operational creditors in its debt resolution plan submitted to the (CoC), which has made the operational creditors wary about recovering their dues from the company.

On October 25, the CoC had approved a plan by ArcelorMittal, which had offered Rs 420 billion upfront cash to the lenders as against Rs 490 billion of Essar Steel’s dues to banks. But ArcelorMittal’s plan offers Rs 2.14 billion to operational creditors, against Rs 49.95 billion of claims filed by them.

Both (IOC) and Bharat Petroleum Corporation (BPCL) have been classified operational creditors in the case. According to the data submitted to the resolution professional, IOC’s outstanding dues aggregate to Rs 37.62 billion, while that of are Rs 2.61 billion. Thus, the total outstanding for state-owned oil refiners is around Rs 40.24 billion, which is around 80 per cent of the total outstanding operational credit of Rs 49.76 billion of

ALSO READ: India's Essar Steel creditors' panel chooses ArcelorMittal's joint bid

“The operational credit for oil marketing is mainly due to buying of gas from these marketing majors,” said an insider. When asked, IOC Chairman Sanjiv Singh said he was not aware of any outstanding dues from Essar Steel.

Essar Steel operational creditors to move NCLT to seek Rs 50 bn of dues

Standard Chartered (StanChart) Bank, another Essar Steel creditor, also raised objections to the ArcelorMittal plan, saying its dues have not been taken into account. The bank is getting only Rs 780 million, according to the plan cleared by the CoC, as against its dues of Rs 37.35 billion. StanChart has also moved the

A last-minute Rs 543-billion plan by the Ruias offering full settlement to all creditors, including operational creditors, was not considered by the CoC on October 25, and lenders had already voted in favour of Arcelor’s offer. The Ruias’ offer will now also be placed before the for its consideration, said a source close to the development.

The operational creditors of Essar Steel are not the only ones moving the courts to recover their dues. Earlier, Larsen & Toubro (L&T) had moved the National Company Law Appellate Tribunal seeking its Rs 9-billion from The had rejected L&T’s plea.

First Published: Mon, November 05 2018. 20:19 IST
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