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The long-drawn battle for acquisition of stressed Essar Steel assets seems to be far from over with the much-awaited verdict of National Company Law Tribunal favouring the ₹43,000-crore bid of ArcelorMittal.
Even though NCLT approved ArcelorMittal bid to pay ₹42,000 crore to financial creditors, Ruias-backed Essar Group seems to be weighing its options to take the case to a higher court.
“We continue to believe that our settlement proposal of ₹54,389 crore is the most compelling one available to Essar Steel creditors and fulfils the IBC’s declared overriding objective of value maximisation, which has been established time and again by courts at all levels. We are also confident of the legal validity of our said offer made under Section 12A, which provides for the withdrawal from the IBC process by making full payment to the creditors. We are awaiting a copy of the NCLT order, and will take a call on next steps after examining the same,” said an Essar spokesperson.
Meanwhile, ArcelorMittal said it hopes to complete the transaction as soon as possible.
Lakshmi Mittal-led ArcelorMittal, which has bid for Essar Steel in joint venture with Japan’s Nippon Steel, has already tied-up funding for the Essar Steel acquisition. The company, last November, entered into a $7-billion term facilities with a group of lenders in this connection. Any amount borrowed by the joint venture under the agreement are irrevocably and unconditionally guaranteed by ArcelorMittal, said the company in its latest annual report.
It has already paid ₹7,469 crore to the financial creditors of Uttam Galva and KSS Petron lenders. Apart from paying financial creditors, it will pump in ₹8,000 crore capital into Essar Steel. The company has also provided a $0.6 billion performance guarantee in connection with the execution of the resolution plan. The resolution plan also includes a capital expenditure plan of ₹18,697 crore to be implemented in two stages over six years.
Essar Steel is among 12 large corporate accounts shortlisted for insolvency proceedings in June 2017. State Bank of India and Standard Chartered Bank filed insolvency proceedings against the company at the Ahmedabad bench of the NCLT.
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