Essar Steel’s resolution, which has seen ArcelorMittal and Numetal locked in a bitter battle, will miss its revised deadline of May 28. It had already surpassed its initial 270-day resolution period on April 28.
Mukul Rohatgi, counsel for Numetal, told the National Company Law Appellate Tribunal (NCLAT) that Numetal has severed its association with Rewant Ruia, son of Essar Steel promoter Ravi Ruia, to become eligible to buy the steel company.
This is the second petition filed by the company in the NCLAT since the Ahmedabad bench of the NCLT passed its order on April 19.
At present, ArcelorMittal is in the race to acquire debt-laden Essar Steel, currently undergoing insolvency proceedings as it owes more than Rs 45,000 crore to over 30 banks.
In 2017, ArcelorMittal had revenues of USD 68.7 billion and crude steel production of 93.1 MT, while its own iron ore production reached 57.4 MT. It is listed on stock exchanges of New York, Amsterdam, Paris, Luxembourg and Spain.
The SBI-led consortium of creditors rejected both the bids, finding them ineligible under Insolvency and Bankruptcy Code (IBC). ArcelorMittal had been trying for long to enter India but could not get any success so far.
Essar Steel had a debt of Rs 49,000 crore and was referred to NCLT in June last year. ArcelorMittal in a separate petition challenged its disqualification on the grounds that it had exited Uttam Galva before submitting a bid for Essar Steel on February 12.
Numetal’s bid was held to be ineligible since one of the persons associated with the company, Rewant Ruia, is related to the promoters of Essar Steel.
Banks have decided to seek a legal opinion on whether to open up the auction of Essar Steel for fresh bids. Lenders are likely to turn down the two bids on financial terms — and not Clause 29 (A) — and then open up the auction for fresh round of bidding.
The bench comprising judges Manorama Kumari and HP Chaturvedi admonished the CoC and resolution professional (RP) Satish Kumar Gupta for not following due procedures by not providing “sufficient chances” to both the resolution applicants.
ArcelorMittal has teamed up with Nippon Steel & Sumitomo Metal Corporation (NSSMC) in its attempt to get control of Essar Steel. The two will jointly acquire and manage the Indian steel firm.
OSPIL is strategically important since its pipelines carry iron slurry to feed Essar Steel’s plant and without access to this pipeline, running the plant could be difficult.
The bankers panel had rejected ArcelorMittal’s and Numetal’s bid citing technical issues.
Essar Steel, which has a steel-making capacity of 9.7 MTPA, owes over Rs 45,000 crore to lenders, of which Rs 31,671 crore was classified by banks as NPA as of Mar 31, 2016.
ArcelorMittal India and Numetal Mauritius emerged as final bidders Monday.