New Delhi: The National Company Law Appellate Tribunal (NCLAT) on Friday held Russia’s VTB Capital-backed Numetal’s second bid valid and asked the world’s largest steel manufacturer ArcelorMittal to clear dues of Uttam Galva and KSS Petron till date (amounting to excess of ₹ 7,000 crore) within three days to turn its bid eligible for taking over debt-ridden Essar Steel.
A two-judge NCLAT bench headed by Justice S.J. Mukhopadhyay asked the committee of creditors (CoC) to consider both the plans after the payment is made by ArcelorMittal. The CoC is expected to meet next week to decide on the bids.
In the second round of bidding, Anil Agarwal’s Vedanta Resources also joined the race and the CoC might consider all the three plans while making the final decision, said a person familiar with the development.
The appellate tribunal in its judgment allowed the lenders to further negotiate bids for Essar Steel.
The judgment comes almost around two months after the appellate tribunal reserved its decision on the matter after hearing petitions filed by resolution applicants, Numetal and ArcelorMittal, challenging their disqualification in the first round of bids.
ArcelorMittal, in its plea, had challenged its disqualification on 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 NCLT in June 2017. After the two firms were disqualified by the resolution professional under Section 29A of IBC, 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 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 a 25% stake in Numetal. VTB is the largest investor with a 40% stake.