In a big win for ArcelorMittal, Supreme Court on Friday set aside NCLAT judgment, approving its Rs 42,000 crore bid for acquiring debt-struck Essar Steel. The July 4 order had provided for equal distribution of proceeds between financial and operational creditors in the distribution of ArcelorMittal’s bid amount. Now, the takeover would take place according to the October 23, 2018, resolution plan of ArcelorMittal.The judgment by a bench headed by Justice R F Nariman also pronounced that there is no doubt that the ultimate discretion on distribution of proceeds is with the committee of creditors (CoC).
The SC ruling can be seen as a win for lenders too as the July order by NCLAT had ruled that the fund-distribution should be on equal terms between all creditors ranging from financial to operational lenders with claims over Rs 1 crore to recover 60.7 per cent of their total dues. The ruling had implied a steep cut for financial creditors as against 89.8 per cent according to the CoC’s revised plan for the distribution of funds. SBI, ICICI Bank, Canara Bank, Corporation Bank, PNB, IDBI, and Bank of India are among the major creditors.