In a major turn of events in the resolution plan of Essar Steel, the National Company Law Appellate Tribunal (NCLAT) asked Ruias to pay the group's entire bad loans first as per the Supreme Court order, said media reports.
The NCLAT told Essar Steel Asia Holdings (ESAH) that the appellate tribunal would consider the company's Rs 54,389-crore resolution plan only if the firm pays Essar Group’s entire bad debt.
“Think of Rs 80,000 crore more, we will make some room for you, whatever the amount is,” a two-member bench of the NCLAT led by justice SJ Mukhopadhaya was quoted as saying in the report.
The Ruias, who are also the founders of the Essar Group, have to repay lenders an estimated Rs 80,000-85,000 crore at the group level, Financial Express quoted their counsel as saying to the NCLAT bench.
The NCLAT also asked ArcelorMittal why it could not offer more for Essar Steel, which is worth of about Rs 54,000 crore, said the report.
ArcelorMittal had offered to pay Rs 42,000 crore to take over the bankrupt Essar Steel.
As per ArcelorMittal’s resolution plan, Rs 42,000 crore will be paid to the secured lenders, while an additional Rs 8,000 crore will be pumped in as working capital, said a PTI report.
Early this month, the National Company Law Tribunal (NCLT) had approved ArcelorMittal SA’s bid for debt-ridden Essar Steel, potentially ending months of court battles and opening the country’s steel industry to outsiders, reported Reuters.
ArcelorMittal confirmed the NCLT had approved the takeover of the 10 million tonne steel plant of Essar Steel by itself and Japan’s Nippon Steel & Sumitomo Metal Corp, paving the way for the first major foreign participation in India’s steel sector.
ArcelorMittal has been trying to enter India’s fast-growing steel market, which is dominated by local companies, for over a decade but bureaucratic hassles and land acquisition woes stifled its bids.
The NCLT had approved ArcelorMittal’s bid in October, even as Essar’s founders — the billionaire Ruia family — tried to hold onto the company, offering Rs 54,389 crore to clear its debts.
— With inputs from agencies
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Updated Date: Mar 15, 2019 15:26:32 IST