Essar Steel bidding: Numetal moves NCLAT against ineligibility order
NCLT Ahmedabad had disqualified Numetal’s bid for Essar Steel on the grounds that Rewant Ruia, son of Ravi Ruia, is a beneficiary of a trust that backed Aurora Enterprises, which in turn held about 25% stake in Numetal
Mumbai: Numetal (Mauritius) Ltd on Friday moved the National Company Law Appellate Tribunal (NCLAT) against an order by the Ahmedabad bench of National Company Law Tribunal (NCLT) that disqualified its bid for Essar Steel for being ineligible under Section 29 A of the Insolvency and Bankruptcy Code.
Numetal was disqualified on the grounds that Rewant Ruia, son of Essar Steel promoter Ravi Ruia, is a beneficiary of a trust that backed Aurora Enterprises, which in turn held about 25% stake in Numetal.
NCLAT issued notices to a committee of Essar Steel creditors, the resolution professional running the auction of the company, and ArcelorMittal who was on caveat.
Numetal’s appeal would be heard on 17 May along with the cross appeal filed by it and ArcelorMittal, the other disqualified bidder for Essar Steel.
NCLT had on 19 April dismissed the first round of bidding for Essar Steel on the ground that committee of creditors and the resolution professional did not follow the procedure prescribed under the Insolvency and Bankruptcy Code.
However, it ruled that ArcelorMittal and Numetal must clear debts in defaulting companies where they hold stakes before bidding for Essar Steel again.
Last week, Numetal—backed by Russia’s VTB Capital—had challenged the same NCLT court order allowing rival ArcelorMittal to clear bank dues of associate companies so that it can become eligible to acquire Essar Steel. ArcelorMittal, on the other hand, had challenged its own disqualification from bidding in appeal before NCLAT.
Essar Steel has a debt of Rs49,000 crore and was referred to NCLT in June last year. After the two finalists for Essar Steel acquisition were disqualified by the resolution professional under Section 29 A of the Insolvency and Bankruptcy Code, which prohibits related parties of defaulting firms from participating in the resolution process. The two firms had then filed appeals before NCLT.
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