Lenders to Essar Steel on Monday argued that the plea by Essar Steel Asia Holding to consider the Rs 54,389-crore offer made by the Ruias should be dismissed. At the hearing in the Ahmedabad bench of the National Company Law Tribunal (NCLT), the lenders’ lawyers for termed the petition ‘frivolous’.
The counsel for the committee of creditors (CoC) for Essar Steel Ravi Kadam also mentioned that the promoters had not argued for reconsideration after the entity’s restructuring plan was rejected in July 2017. This suggested that the current petition by Essar Steel Asia Holding was merely an attempt to delay the possible execution of the ArcelorMittal resolution plan, they added.
As is known, more than 90% of CoC had voted in favour of the bid by ArcelorMittal which has promised Rs 39,500 crore by way of cash upfront and currently awaits approval from NCLT for execution.
A day after, Essar Steel promoters offered to pay Rs 54,389 crore towards a full settlement of the entire admitted claims of the financial creditors, operational creditors, and workmen and employees of Essar Steel. The package included an upfront cash payment of Rs 47,507 crore to all creditors, including a payment of Rs 45,559 crore to the senior secured financial creditors.
Subsequently, Essar Steel Asia Holdings, which is a holding company of Essar Steel, filed a caveat in NCLT that it be allowed to plead its case before any orders are passed in the matter.
The Supreme Court’s October order in the matter was read out yet again as part of the arguments to indicate that the order only allowed for submission of plans by Arcelor and Numetal and that the one by the Ruias was beyond the SC’s judgment.
The SC order had stated that both ArcelorMittal and Numetal, which were in the race to acquire Essar Steel, would have to clear any outstanding dues within two weeks to become eligible to bid for the company.
On his part, counsel for ArcelorMittal Abhishek Manu Singhvi argued that only financial and operational creditors or the committee of creditors can withdraw the plan with 90% support under Section 12A, also calling for dismissal of the Essar Steel Asia Holding petition, and also called it a violation of the SC’s order.
The bench will continue to hear arguments on December 13. Meanwhile, operational creditors urged the tribunal to conduct day-to-day hearings on the matter.
As many as 31 operational creditors of Essar Steel moved NCLT in five separate petitions, urging that it direct the CoC to ensure full payment to them and take necessary steps to modify ArcelorMittal’s resolution plan for that. Alternatively, they urged the tribunal to direct the CoC to also consider the last minute offer of the Essar Steel promoters which promises to pay all creditors in full.
SOURCE: Financial Express, December 11,2018