ArcelorMittal has appealed before the National Company Law Appellate Tribunal (NCLAT) against the National Company Law Tribunal (NCLT) ruling, allowing it to bid for Essar Steel only after clearing of dues within 30 days.
Meanwhile, Numetal has also moved the NCLAT against this ruling, contending that ArcelorMittal should not be allowed to participate in the bidding even if the latter’s dues were cleared.
The appellate tribunal has issued notices to the resolution professional (RP) and the committee of creditors (CoC) and both the pleas will be heard on May 17.
Recently, in the Essar case, the NCLT Bench had sent the first bids — from Numetal and ArcelorMittal — back to the RP and the CoC, asking them to consider all the resolution plans before initiating fresh bids for the CoC’s consideration. This is in the light of statutory provisions pointing to a 30-day cure period for payment for dues, in case the resolution applicants were found to be ineligible under Section 29A(c).
The section bars a promoter of a non-performing asset (NPA) from submitting a resolution plan for more than a year .
The NCLT Bench had observed that mere sale of shares and declassification by ArcelorMittal would not absolve them from their responsibility and pointed to the clearing of dues for Uttam Galva Steels and KSS Petron — NPAs for more than a year— as a cure. At the same time, it had asked the CoC to take an independent view on the issue of eligibility.
The financial bids in the first round were opened at a marathon CoC meeting on Tuesday and sources said ArcelorMittal’s bid was higher than Numetal’s.
However, no decision on eligibility or fresh bids was taken then. The next meeting was slated for April 27.
In the March 21 CoC meeting, Numetal and ArcelorMittal were found ineligible. The panel had also decided to go for the second round of bids. Expressions of interest were shortlisted to invite bids in a short time.
Apart from Numetal, which had partnered with JSW Steel and ArcelorMittal to place the bid, Vedanta had submitted a bid. Numetal had moved the NCLT, subsequently, seeking a stay on the opening of the bids and the process remained stalled till NCLT order, which stated that the second round of bids might have been prudent but not legally sound.