You are here: Home » Companies » News
Business Standard

Essar Steel sale: Numetal moves NCLAT against NCLT; Arcelor writes to SBI

Numetal may also bring up the issue of apprehension of its bid being rejected by the CoC later

Ishita Ayan Dutt  |  Kolkata 

insolvency and bankruptcy code

has moved the (NCLAT) challenging the order that pointed towards payment of overdue amount for to cure its ineligibility. Legal sources in said the order, which suggested a 30-day cure period for payment of overdues for ArcelorMittal, wasn't applicable. It was applicable to who had bid before the IBC amendment, but submitted its bid for after the amendment, they said.

The (CoC) for were to meet on Friday, but there is ambiguity on whether they will.

may also bring up the issue of apprehension of its bid being rejected by the later.

Sources close to said: "There seems to be no end to the lengths Numetal will go to prevent ArcelorMittal being selected as the new owner for Media reports suggest ArcelorMittal has made a superior offer and they have always maintained they are eligible. Furthermore, they are the world's leading steel company and, in partnership with Nippon, clearly have all the industrial knowledge and experience to provide Essar with a strong future. It is disappointing for the stakeholders of Essar Steel that there will be further attempts to delay a swift resolution.”

After the remanded the first round of bids to the resolution professional (RP) and CoC, the first meeting of the was held on April 24. The financial bids were opened at the meeting and ArcelorMittal's bid was found to be higher than Numetal's. However, lenders had not taken a call on the issue of eligibility of ArcelorMittal and Numetal or to go for a fresh bid, and it decided to meet again on April 27.

ArcelorMittal, meanwhile, has written to the (SBI) that it would pay all dues of The offer is Rs 53 billion, subject to reconciliation.

ArcelorMittal didn't comment on the letter, but said: “We have always believed and continue to believe that our first offer is eligible.”

The letter comes after the NCLT order, which remanded back the first bids to the and CoC, saying due procedure had not been followed.

The court felt enough time had not been given for rectification of bids. The court has referred to proviso 30 (4), which says that if the resolution applicant is ineligible under clause (c) of Section 29A, the resolution applicant shall be allowed by the such period, not exceeding 30 days, to pay overdue amounts.

was a non-performing asset for more than a year and under Section 29A of the IBC, a promoter of a defaulting company was debarred from the bidding process unless it paid the dues. ArcelorMittal sold shares to terminate the co-promotion agreement even though it did not have management control or board representation.

The NCLT Bench, however, observed that ArcelorMittal would have to pay overdue amount for Uttam Galva Steels and to make itself eligible. In KSS, L N Mittal had personal shareholding, which he sold ahead of the KSS, in turn, has a subsidiary, KSS Petron, which is also an NPA for more than a year. Despite making observations, the Bench also asked the CoC to take an independent view in the matter.

First Published: Fri, April 27 2018. 00:51 IST