The Essar Steel acquisition battle has shifted to the Supreme Court with the State Bank of India moving the highest court against the NCLAT (National Company Law Appellate Tribunal) suggestion to give more cash to operational creditors. In the voting conducted by Essar Steel’s lenders, almost 70 per cent of lenders agreed to give Rs 1,000 crore more to operational creditors as per a NCLT (National Company Law Tribunal) and NCLAT suggestion.
The SBI action came just days before the NCLAT was to hear the outcome of the CoC meeting on April 9.
Deutsche Bank and SBI — the secured lenders of Essar Steel — are against giving extra cash to operation creditors who have made Rs 4,700 crore of claims against Essar Steel. As per the ArcelorMittal plan, the operational creditors were to get only Rs 200 crore from the plan. This led to many operational creditors moving the NCLT and NCLAT against the proposal.
In the proposal cleared by the CoC last week, operational creditors agreed to set aside Rs 1,000 crore more from the Rs 42,000 crore debt resolution plan of ArcelorMittal. Essar Steel was sent for debt resolution in June 2017 after the company failed to repay its debt worth Rs 47,000 crore to Indian banks.
Source: Business Standards, April 1, 2019