The move will offer financial creditors Rs 41,987 crore while operational creditors would get Rs 214 crore out of their total unresolved dues.
Indian steel conglomerate, ArcelorMittal S.A. has recently bagged approval from the National Company Law Appellate Tribunal (NCLAT) for implementing its Rs 42,000 crore resolution plan to takeover debt-ridden Essar Steel, a move that reports claim may face challenge in the Supreme Court from Essar.
Sources close to the move claim that NCLAT’s two-member bench lead by Justice S.J. Mukhopadhaya has ordered ArcelorMittal to deposit the amount with the Committee of Creditors (CoC), which reportedly includes four major lenders, namely State Bank of India, Edelweiss ARC, IDBI Bank and ICICI Bank.
Moreover, according to a statement, the tribunal said that the resolution professional will be the head of the monitoring committee and will perform in accordance with the law to ensure that the firm is a going concern. It also said that it will look into the issue of discriminatory distribution of the funds between operational and financial creditors.
For the record, NCLAT had recently refused to stay NCLT’s (National Company Law Tribunal) Ahmedabad bench order that approved ArcelorMittal’s Rs 42,000 crore sale bid for Essar Steel, and introduced a new plan for the distribution of bid amount between operational and financial creditors of the debt-laden firm.
Furthermore, NCLAT two-judge bench had also asked creditors to consider offering operational creditors with 10% of the total proceeds, up from 5% considered in the agreed plan.
However, the agency reports that Prashant Ruia, Essar Steel’s former promoter, along with two other directors of the steelmaker’s earlier board had challenged NCLT’s approval to ArcelorMittal’s bid for the debt-ridden company on the appeal that their offer of Rs 54,389 crore was higher as it clears 100% of the outstanding debts of both operational and financial creditors.
Reports from Business Today claim that ArcelorMittal’s proposed resolution plan will offer financial creditors Rs 41,987 crore of their total Rs 49,395 crore dues, while Rs 214 crore will be offered to operational creditors against the unresolved Rs 4,976 crore.