Ahmedabad: The Ahmedabad bench of the National Company Law Tribunal (NCLT) on Tuesday refused to stay the rebidding for Essar Steel Ltd slated for 2 April.
The interim resolution professional (IRP) appointed by Essar Steel’s lenders last week disqualified bids by ArcelorMittal India and Numetal Mauritius.
The lenders’ panel had decided to ask all bidders to submit fresh bids, following which ArcelorMittal and Numetal moved NCLT.
The tribunal adjourned hearing in the matter till 4 April, said Manorama Kumari, adjudicating authority at the Ahmedabad bench of NCLT.
However, the final decision of the rebidding round will depend on the outcome of the petitions filed by ArcelorMittal India and Numetal Mauritius.
The hearing was adjourned since a full bench of three judges was not present on Tuesday.
The tribunal also directed all the parties to submit their replies to the petitions by 2 April.
ArcelorMittal has also sought disqualification of Numetal Mauritius.
ArcelorMittal’s bid for Essar Steel faced disqualification for its stake in loan defaulter Uttam Galva.
In the case of Numetal, one of the promoters of the special purpose vehicle (SPV), Rewant Ruia, son of Ravi Ruia, is one of the original promoters of Essar Steel.
Section 29(A) of the Insolvency and Bankruptcy code bars defaulting promoters from participating in the corporate insolvency resolution process.
The Numetal petition said resubmission of bids should be deferred till the matter is heard on merits.
Their plea was, however, not admitted by NCLT.
ArcelorMittal, represented by Abhishek Manu Singhvi as legal counsel, had also sought deferment of the bidding.
Senior counsel Darius Khambatta, who was appearing on behalf of the committee of creditors, said both ArcelorMittal and Numetal can participate in the re-bidding process after taking corrective measures that had led to their earlier disqualification.
The fresh bids are open to those who had submitted expressions of interest, the counsel for the resolution professional told the court.
So, apart from Numetal and ArcelorMittal, companies including Vedanta Ltd, Tata Steel Ltd, Nippon Steel and Sumitomo Metal Corp., and Steel Authority of India Ltd (SAIL), can also participate in the re-bidding process.
Khambatta argued that with the 270-day insolvency resolution deadline ending on 29 April, the bidding process needed to be completed quickly.
“The NCLT hearing has been adjourned till 4 April 4. The deadline for rebids for Essar Steel remains 2 April. ArcelorMittal intends to re-bid, though we continue to strongly believe that our original offer is eligible. The outcome of the rebid remains subject to the outcome of the ongoing case at NCLT," ArcelorMittal said in a statement.
Essar Steel owed lenders around Rs45,000 crore, of which Rs31,671 crore had become non-performing as of 31 March 2016. The company owes as much as 93% of this amount to a consortium of 22 creditors led by State Bank of India.
Essar Steel runs a crude steel capacity of 10 million tonnes per annum at Hazira in Gujarat.
Lenders are expected to meet on 5 April to evaluate the bids, subject to the outcome of the applications filed by Numetal and ArcelorMittal, said a company official in the know of the matter, who did not want to be named.