NCLAT may ask ArcelorMittal to deposit Rs 42,000 crore bid amount for acquiring Essar Steel

The bench also asked ArcelorMittal to file an affidavit before it, detailing the steps to be taken for implementation of the resolution plan of debt ridden Essar Steel. “ArcelorMittal India, successful resolution applicant, would file an affidavit for implementation of plan,” the bench said, as per a PTI report.

“The Appellate Tribunal may direct the successful resolution applicant to deposit money in one or another account in next date of hearing,” the report said.

The bench said that original plan approved by NCLT Ahmedabad has to be implemented. While ArcelorMittal’s counsel said though the firm was ready with the money, it could not deposit the same without lenders executing a debt assignment agreement in favour of the company. The counsel also alleged that there was some sort of reluctance on part of the lenders to put the debt assignment agreement into effect.

The bench directed the operational creditors and financial creditors of Essar Steel to file a affidavit next week, detailing their claims approved by resolution professional (RP) and committee of creditors (CoC).

“Financial creditors and operational creditors are allowed to file one page affidavit giving details of their claims approved by RP and its percentage,” it said.

Moreover, it has also asked the Gujarat State Tax department to file an affidavit over its claims.

The NCLAT was hearing a batch of petitions filed by operational creditors, Gujarat State Tax department and others.

There is a dispute between the financial creditors led by the State Bank of India (SBI) and other creditors on the redistribution of the bid amount. The appellate tribunal, while refusing to stay the NCLT-Ahmedabad order approving ArcelorMittal’s bid to take over Essar Steel, had directed the lenders to “jointly consider” redistribution of the bid amount of Rs 42,000 crore as per the tribunal’s March 8 order, which had suggested an 85:15 distribution between the financial and operational creditors against the 90:10 ratio proposed in the resolution plan approved by the CoC. 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 and are contesting before the NCLAT.

Essar Steel owns a 10-million-tonne steel mill at Hazira in Gujarat. This was among the first 12 cases selected by the Reserve Bank of India to be resolved under the Insolvency and Bankruptcy Code (IBC).

Reiterating its earlier order, the NCLAT suggested the CoC should not discriminate against the operational creditors in the distribution of the ArcelorMittal bid amount.