ArcelorMittal, one of the bidders for the bankrupt Essar Steel, which was asked by the National Company Law Appellate Tribunal (NCLAT) to clear dues of Rs 7,000 crore of firms it was previously associated with by September 11 to be eligible to bid, did not pay up on Tuesday.
The company will wait for a direction from the Supreme Court that it moved on Monday challenging the appellate tribunal’s order. The SC on Tuesday agreed to hear the petition on Wednesday.
Challenging the NCLAT order, ArcelorMittal said in its petition that the order fails to explain how this money has to be paid and also fails to recognise that some financial arrangement would have to be made to make these funds available to the debtor companies. The company said that currently it is not even a shareholder of these companies and so far as one of them, KSS Petron, is concerned, at no point of time was it even a related firm.
According to the company, it is in no way obliged to pay these amounts and no demand has been raised by any financial institutions or banks, and so its offer to pay these amounts is connected with the success of its resolution plan.
The committee of creditors (CoC) of Essar Steel will also wait for the Supreme Court’s order. “The court will have to decide the future course of action. In this case, the CoC does not have the power to decide whether additional time can be given to ArcelorMittal,” a senior banker said on condition of anonymity. The CoC is likely to meet after the Supreme Court order. Its meeting on Monday had remained inconclusive.
ArcelorMittal has agreed to clear the dues of Rs 7,000 crore only if it is declared the highest bidder for Essar Steel. The NCLAT has also ruled that the second bid placed by rival Numetal is eligible. After the NCLAT’s order last week, ArcelorMittal increased its bid value for the Essar Steel to Rs 42,000 crore, to stay ahead of Numetal.
“If value optimisation is the key objective, then it seems only logical that the CoC would want to wait for direction from the Supreme Court,” another banker with a public sector bank said, requesting anonymity. —FE