A day after the Supreme Court directed ArcelorMittal and Russian VTB Bank-promoted Numetal Mauritius to clear all the dues to become eligible for Essar Steel bidding, the Committee of Creditors is calculating the overall defaulted amount the bidders have to settle.
In the case of Lakshmi Mittal-owned ArcelorMittal, banking sources said the payment could range between ₹13,000 crore and ₹17,000 crore, much higher than the original dues of ₹7,000 crore.
The two companies – Uttam Galva and KSS Petron — alone owe close to ₹7,000 crore and interest payments of ₹6,000 crore, sources said. If one has to include the default of Lakshmi Mittal’s brother Pramod Mittal companies — Gonterman Piples and Ispat Profile — the entire payout will increase by another ₹4,000 crore to about ₹17,000 crore, he added.
The Supreme Court in its judgment said “since this aspect of the case (to include Pramod Mittal companies’ default) has not been argued before the authorities below, though raised in an IA (Interlocutory Application) by Numetal before the Appellate Authority, we will not countenance such an argument for the first time before this Court”.
Bankers in discussion
Both ArcelorMittal and Numetal refused to comment on their actual liability.
Bankers are in discussions with the lawyers on the right interpretation of the verdict, so that they do not want to miss an opportunity to settle another NPA account, sources said.
Even without including Pramod Mittal’s default, ArcelorMittal will have to shell out ₹55,000 crore, which includes the ₹42,000 crore already committed bid for Essar Steel.
Arriving at the liability of Numetal seems to be more complicated as it will include the entire default of Essar Group companies as the presence of Rewant Ruia is considered as persons acting in concert.
Even if Numetal has to pay up for the Essar Steel default of ₹45,000 crore, it will become substantial along with interest and the company itself will be out of insolvency process, said a banker.
In all, he added, billionaire Anil Agarwal-owned Vedanta may turn out to be the dark horse in the race for Essar Steel as the Supreme Court has ruled rebidding.
“We make it clear that in the event that no plan is found worthy of acceptance by the requisite majority of the Committee of Creditors, the corporate debtor, Essar Steel, shall go into liquidation,” said the judgement.