Bharat Petroleum Corp Ltd (BPCL) today sought the liquidation of the assets of Essar Steel India Ltd at a bankruptcy court. The public sector oil company objected to ArcelorMittal’s resolution plan, which, it said, sidestepped dues to operational creditors like BPCL.
The financial creditors had voted in favour of the resolution plan of ArcelorMittal on 25 October. ArcelorMittal’s resolution plan envisages an upfront payment of ₹42,000 crore to lenders and an additional ₹8,000 crore towards capital expenditure.
A clutch of operational creditors have challenged the committee of creditors and the resolution professional’ decision to accept ArcelorMittal’s resolution plan. Standard Chartered Plc has also approached the NCLT as a dissenting financial creditor so that it can be heard before the tribunal decides on ArcelorMittal’s bid.
Earlier during the hearing, the counsel for the committee of creditors had told the NCLT that after assessment by three independent valuers they had found the creditors would not get more than ₹15,000 crore if Essar Steel went in for liquidation.
Challenging this, the counsel for BPCL today said there was no reason to believe that Essar Steel would not receive more than ₹15,000 crore rupees if it went into liquidation. He said the shareholders of Essar Steel, led by the former promoters, had already expressed their intent to pay the entire debt of about ₹55,000 crore as compared to the ₹42,000 crore offered by ArcelorMittal as part of its resolution plan.
The BPCL counsel said if Essar Steel went into liquidation, an official liquidator would invite bids and there was a chance that BPCL might recover its dues in full. According to the contention of ArcelorMittal and the resolution professional, BPCL, as an operational creditor seeking ₹500 crore for supply of liquefied natural gas, was not entitled to any money as part of the resolution plan.
About a week ago, the NCLT had turned down Essar Steel shareholders’ bid to regain control over the company. Meanwhile, the National Company Law Appellate Tribunal on Monday directed the NCLT Ahmedabad bench to take a final decision on ArcelorMittal's resolution plan for Essar Steel by February 11, failing which it would call records and pass an order accordingly.