Lenders Ask NCLT To Dismiss Plea To Consider Ruias Offer For Essar Steel

- Dec 11, 2018-

Financial Express reported that lenders to Essar Steel on Monday argued that the plea by Essar Steel Asia Holding to consider the INR 54,389-crore offer made by the Ruias should be dismissed. At the hearing in the Ahmedabad bench of the National Company Law Tribunal (NCLT), the lenders’ lawyers for termed the petition frivolous. The counsel for the committee of creditors (CoC) for Essar Steel Ravi Kadam also mentioned that the promoters had not argued for reconsideration after the entity’s restructuring plan was rejected in July 2017. This suggested that the current petition by Essar Steel Asia Holding was merely an attempt to delay the possible execution of the ArcelorMittal resolution plan, they added.

As is known, more than 90% of CoC had voted in favour of the bid by ArcelorMittal which has promised INR 39,500 crore by way of cash upfront and currently awaits approval from NCLT for execution.

On his part, counsel for ArcelorMittal Abhishek Manu Singhvi argued that only financial and operational creditors or the committee of creditors can withdraw the plan with 90% support under Section 12A, also calling for dismissal of the Essar Steel Asia Holding petition, and also called it a violation of the SC’s order.

The bench will continue to hear arguments on December 13. Meanwhile, operational creditors urged the tribunal to conduct day-to-day hearings on the matter.

As many as 31 operational creditors of Essar Steel moved NCLT in five separate petitions, urging that it direct the CoC to ensure full payment to them and take necessary steps to modify ArcelorMittal’s resolution plan for that. Alternatively, they urged the tribunal to direct the CoC to also consider the last minute offer of the Essar Steel promoters which promises to pay all creditors in full.

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