Business News/ Companies / News/  E-voting for ArcelorMittal’s resolution plan delayed, result on Thursday

Mumbai: The voting process for the approval of the resolution plan submitted by ArcelorMittal Netherlands NV for debt-ridden Essar Steel Ltd was delayed due to minor technical glitch on Tuesday. The voting outcome, which was to be declared on Wednesday evening, consequently got delayed and will now, be declared on Thursday.

To be sure, after the preferred or highest bidder (H1) is announced by the Committee of Creditors (CoC) of a firm undergoing resolution under the Insolvency and Bankruptcy Code (IBC), the resolution plan submitted by the bidder is put to vote through e-voting. Once approved by at least 66% of creditors, the resolution plan is then put up for further approval before the National Company Law Tribunal (NCLT).

Lakshmi Mittal-led ArcelorMittal has agreed to pay 42,000 crore upfront to the creditors of the beleaguered steel firm. Additionally, the world’s largest steel maker will also infuse 8,000 crore over a period of time into Essar Steel, thereby shelling out a total of 50,000 crore to get a foothold in the Indian market.

The battle for Essar Steel, a 10-million-tonne fully integrated steel plant in the port city of Hazira in Gujarat, has been a long drawn-out process, with numerous rounds of bidding, till the Supreme Court stepped in to crack the whip and push for resolution.

Last Friday, Essar Steel’s Committee of Creditors declared ArcelorMittal the highest bidder after the choice came down to the former and Anil Agarwal-promoted Vedanta Ltd. The creditors had discussed the bid by Numetal Mauritius to be ineligible after the VTB Bank-led consortium failed to comply with a Supreme Court directive to settle outstanding liabilities in connected companies.

Even so, Russia’s VTB Bank, the largest stakeholder in the Numetal Mauritius consortium, is also pursuing an appeal in the Supreme Court, seeking permission to make another bid for Essar Steel, either of its own accord or along with a new technical partner.

Leading up to this finale, ArcelorMittal also had to settle 7,469 crore in outstanding dues in Uttam Galva Steels and KSS Petron, two companies in which Mittal had been a promoter, clearing the eligibility barrier to bid for Essar Steel. Under Section 29A of the IBC, bidders cannot be connected to other defaulting entities. Essar Steel has accumulated debt of over 49,000 crore.

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Updated: 24 Oct 2018, 08:46 PM IST
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