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Essar Steel CoC meets over distribution of Rs 42k cr, NCLAT to wait for the outcome

Press Trust of India  |  New Delhi 

The lenders of Wednesday informed the (NCLAT) that meeting of the of the debt-ridden firm is going on over distribution of Rs 42,000 crore coming from the resolution plan of global

The was informed that a decision by CoC on whether StanChart, an unsecured financial creditor, should get higher payout for its dues to would come by Friday, following which it adjourned the matter to April 9 for the next hearing.

"We have to see the outcome of the (CoC) meeting," said a two-member NCLAT bench headed by Justice S J Mukhopadhaya.

The NCLAT had on March 20 asked the resolution professional of to call for a fresh meeting of its CoC to reconsider distribution of Rs 42,000 crore fund.

The also said that the March 8 order of the Ahmedabad-based bench the (NCLT) approving plan should be implemented in "letters and spirit".

During the proceedings of the appellate tribunal, the informed the bench that meeting was underway in accordance with the NCLAT orders.

They submitted that the CoC is considering distribution of funds between the financial creditors and operational creditors as per the suggestions from the bench of the (NCLT).

NCLT has suggested a 85:15 distribution between the financial and operational creditors against the 90:10 distribution between them as proposed in the resolution plan.

Moreover, as per the previous direction of NCLAT, the & Board of informed the ratio of distribution between financial creditors and the operational creditors in the resolution plan.

According to IBBI's counsel, In 88 cases that have seen successful resolution, financial creditors, on an average, have received 48.24 per cent of their claims. While the operational creditors have received 48.41 per cent of their claims, in the same number of cases.

On March 20, in the last hearing, the NCLAT also had directed IBBI to share data over distribution of funds among the financial and operational creditors in the resolution plans.

The NCLAT was hearing a plea by Bank, an operational creditor of the company, challenging the distribution of fund.

is against plan as it was being given only 1.7 per cent of its total dues from Essar Steel, while other financial creditors, forming part of the (CoC), were getting over 85 per cent of their dues.

ArcelorMittal's resolution proposal provides financial creditors Rs 41,987 crore out of their total dues of Rs 49,395 crore.

Operational creditors, under the plan, would get just Rs 214 crore against the outstanding of Rs 4,976 crore.

If the plan is implemented, will only get Rs 60 crore against its claims of Rs 3,187 crore from Essar Steel.

Essar Steel owns a 10-million-tonne at Hazira in

This was was among the first 12 cases selected by the to be resolved under the and Code (IBC).

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

First Published: Wed, March 27 2019. 17:30 IST
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