Ahead of Essar Steel lenders meeting, Numetal moves NCLAT against ArcelorMittal

作者:Christina 時間:2018-04-28 12:08:07 標籤: 分類:

The Numetal consortium Thursday approached the National Company Law Appellate Tribunal (NCLAT) against a possible move by the Essar Steel lenders to give ArcelorMittal 30 days to rework its bid.

Both Numetal and ArcelorMittal have put in bids for Essar Steel.

The move comes even as the Committee of Creditors (CoC) is expected to convene either on Friday or Saturday to decide the next course of action. The CoC, consisting of Essar Steel's lenders, had met on Tuesday, but the meeting proved to be inconclusive.

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The NCLAT will take up Numetal's application on Friday.

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Numetal may also argue against CoC's possible decision to turn down its bid - along with ArcelorMittal's - in the first round of bidding.

The provision

"The provision of 30 days is only applicable for bids that were presented before November 2017, when the ordinance was passed on Insolvency and Bankruptcy Code (IBC). But ArcelorMittal had presented the bid for Essar Steel in February," legal sources close to the development told Moneycontrol.

The ordinance prevented promoters of defaulting company from bidding for stressed assets. ArcelorMittal's investment in  Uttam Galva Steels  has been questioned under the same clause.

Though ArcelorMittal later exited the stressed company, it was argued that it was still Uttam Galva's promoter while bidding for Essar Steel. The world's largest steelmaker had only later exited, and got itself declassified as the promoter of Uttam Galva.

Uttam Galva Steels is on the second list of companies that may be referred to the National Company Law Tribunal (NCLT).

Fresh round

The CoC had on Tuesday found bids by ArcelorMittal and Numetal below Essar Steel's fair value. "While ArcelorMittal's bid was 60 percent of the fair value, that of Numetal was 40 percent of the fair value," said a source close to the development.

Now the CoC is debating whether it should call for a fresh round of bidding, which has already evoked interest from JSW Steel and Vedanta Resources.

Sources said that Numetal may also contend this, arguing that the lenders should first clear the company on the eligibility issue, as per the IBC provision.



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