Following this, the Anil Agarwal-owned company claimed in an announcement to the Bombay Stock Exchange that it has been allowed to take over the debt-ridden company.
If Vedanta is able to finally get through with the resolution plan, Electrosteel will be the second steel company to see completion of insolvency process after Tata Steel took control of Bhushan Steel earlier this month. This would also mean Vedanta’s foray into the steel business.
The appellate tribunal reserved its verdict on Vedanta’s eligibility to submit a resolution plan under Section 29A of the Insolvency and Bankruptcy Code (IBC).
It asked the parties to “act in terms of the (resolution) plan”, which amounts to it vacating an earlier order passed by it asking Vedanta and the CoC to maintain status quo. The tribunal said if Vedanta’s bid is found to be in contravention of the IBC, the lenders will revert the amount received.
A two-judge bench headed by Justice S.J. Mukhopadhyaya was hearing an appeal by Renaissance Steel India Pvt Ltd, another bidder for Electrosteel, against a 17 April order of the National Company Law Tribunal’s (NCLT) Kolkata bench, approving Vedanta's resolution plan for Electrosteel.
Renaissance Steel had contended that Vedanta was ineligible to bid under Section 29A of the IBC as one of Vedanta’s affiliates in Zambia — a unit of its UK-based parent Vedanta Resources Plc — had been found guilty of violating certain environmental laws, punishable with two or more years in jail. Doubts were also cast on Vedanta's eligibility after death of protesters at the group company's copper plant in Tuticorin.
Renaissance Steel had also petitioned against another bidder, Tata Steel Ltd, claiming that its UK subsidiaries had flouted the UK Health and Safety at Work Act, and fines were imposed on it. Four companies had bid for Electrosteel – Vedanta, Tata Steel, Edelweiss and Renaissance Steel India. Electrosteel has a planned steel-making capacity of 2.51 million tonne and a commissioned capacity of 1.5 million tonne.