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Will pay Rs 42,000 crore upfront for Essar Steel: ArcelorMittal to NCLAT

The statement made by ArcelorMittal is similar to the one made by Essar Steel India Limited's Committee of Creditors last week

Aashish Aryan  |  New Delhi 

steel, manufacturing

Steel company on Monday told the National Company Law Appellate Tribunal (NCLAT) it will pay upfront Rs 42,000 crore it had placed as bid for debt-laden India Limited.

The amount will also include a payment of Rs 2,500 crore as guaranteed working capital adjustment, said senior advocate Harish Salve, who appeared for

As had made a profit of Rs 3,495 crore since August 2017, when it was admitted into corporate insolvency process, an extra amount of Rs 1,000 crore over and above the working capital would also be given to the financial creditors, Salve said. Apart from these payments, a sum of Rs 196 crore has been kept aside for operational creditors with claims of less than Rs 1 crore. Rs 17.4 crore has been kept aside for unsecured financial creditors who have a claim of Rs 10 lakh or more.

The statement made by is similar to the one made by India Limited's Committee of Creditors (CoC) last week. The lenders to the company had told the last week that of the total amount Rs 42,000 crore, only nearly Rs 39,500 crore was meant for distribution. The rest Rs 2,500 crore had been kept aside as a minimum guarantee of profit for financial creditors, the CoC had then said.

The company, however, said that it was agnostic as to how the distribution was made among the various creditors and that any extra payment to the financial or operational creditors would have to be made from the Rs 42,000 crore amount itself. The total bid amount was nearly three times the liquidation value of Essar Steel which stood at Rs 18,000 crore and thus “reasonable and adequate to meet the interests of all stakeholders,” the company said.

ArcelorMittal also rejected the claims of Standard Chartered Bank that the lenders to Essar Steel had short changed them by accepting a bid which was lower than Rs 42,000 crore. Standard Chartered had alleged that some lenders of Essar Steel had met secretly with ArcelorMittal and included the debt of Odisha Slurry Pipelines along with Essar Steel.

“They short-changed us to benefit themselves. The plan proposed Rs 42,000 crore plus working capital and not Rs 35,000 crore plus working capital, which has been accepted by the CoC,” Sibal had told the last week. An amount of Rs 2,500 crore, which should have been paid to Standard Chartered, has been diverted to lenders of Odisha Slurry Pipeline India Ltd, which owns the slurry pipeline, he had said.

First Published: Mon, May 20 2019. 21:34 IST
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