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SC restrains Arcelor Mittal from paying for Essar Steel

IANS  |  New Delhi 

The on Friday restrained from acquiring Steel India and ordered status quo on the March 8 order of the (NCLT) approving Arcelor's bid for

The Arcelor's acquisition of would have allowed owner Lakshmi to begin its operations in the Indian

The tribunal had given its approval to the resolution plan offered by for the acquisition of

The (CoC), however, moved the apex court opposing higher payment to (SCB).

After the Friday's order, cannot make payments to the lenders to buy

A bench headed by Justice directed the NCLT to expeditiously decide on appeals in the case.

As per the tribunal order, SCB was allotted only 1.7 per cent of its total admitted claims, while the financial creditors were recovering their claims close to 92 per cent.

The NCLT had directed that the distribution should be done on a pro-rata basis, and SCB should be awarded its share accordingly.

The apex court order is bound to delay Mittal's plan to buy the steel mill, which can produce 10 million metric tonne annually.

Post the acquisition, Arcelor will become the fourth-biggest in the country. It plans to invest trillions of rupees in its infrastructure.

The NCLT had approved Arcelor's and offer to pay $6 billion to lenders and then invest about another $1.1 billion in the company.

The CoC opposed the NCLT decision asking a panel of lenders to consider higher payment to SCB, and contested the Tribunal's view that a substantial part of its Rs 35 billion ($505 million) dues would remain unpaid under Arcelor's plan. The CoC claimed that the distribution of money among the lender as per the plan is unfair.

The panel of lenders and the challenged the tribunal's direction in the top court.

--IANS

ss/nir

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, April 12 2019. 17:14 IST
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