Essar Steel creditors seek 40 days exemption in computation of resolution process
The committee of creditors urged NCLAT quick debt resolution of Essar Steel as lenders are incurring a loss of ₹17 crore daily due to the pending litigation
New Delhi: The committee of creditors (CoC) to Essar Steel on Wednesday sought exemption of around 40 days in computation of the corporate insolvency resolution process from the National Company Law Appellate Tribunal (NCLAT).
The entire period starting 19 April 2018 to the final disposal of the present appeals be specifically excluded in computation of the corporate insolvency resolution process period (i.e. about 40 days), it said in its submission.
On 19 April, NCLT ruled that ArcelorMittal and Numetal must clear debts in defaulting companies where they hold stakes before bidding for Essar Steel.
“We want quick resolution,” said lawyer Sudipto Sarkar, appearing for the CoC. He said that lenders are incurring a loss of ₹17 crore daily due to the pending litigation.
In response, a two-judge NCLAT bench headed by justice S.J. Mukhopadhyay said that it will take another 2-3 weeks for the court to give its judgment on the matter.
The bench was hearing the cross petitions filed by the two disqualified bidders-ArcelorMittal and Numetal Ltd.
Under IBC, cases once admitted are supposed to be resolved within 270 days; if not, companies go into liquidation. During the resolution process, management control is taken away from promoters and vested with a resolution professional.
On Tuesday, ArcelorMittal India Ltd reiterated that the eligibility of its resolution plan should be judged on the date of submission
ArcelorMittal, in its petition, had challenged its disqualification on the grounds that it had exited Uttam Galva before submitting a bid for Essar Steel on 12 February.
Essar Steel has a debt of ₹49,000 crore and was referred to the NCLT in June 2017. After the two companies were disqualified by the resolution professional under Section 29(a) of the insolvency code, which prohibits related parties of defaulting firms from participating in the resolution process, the two firms had filed appeals before the tribunal.
Numetal was disqualified on the ground that Rewant Ruia, son of Essar Steel promoter Ravi Ruia, is a beneficiary of a trust that backed Aurora Enterprises, which in turn held a 25% stake in Numetal. VTB is the largest shareholder with a 40% stake. The matter will next be heard on 16 July.