(Mint)
(Mint)

Essar Steel reports 4,229 cr EBITDA during insolvency period

  • In an affidavit filed before the NCLAT last week, the resolution professional said the company earned 4,000 crore from its operations between August 2017 and February 2019
  • The resolution professional also mentioned an earning of 229 crore for March

New Delhi: Debt-ridden Essar Steel has registered an EBITDA (earnings before interest, tax, depreciation and amortisation) of 4,229 crore during its Corporate Insolvency Resolution period (over 600 days).

In an affidavit filed before the National Company Law Appellate Tribunal (NCLAT) last week, the resolution professional said the company earned 4,000 crore from its operations between August 2017 and February 2019. In addition, the RP also mentioned an earning of 229 crore for March this year.

Moreover, this amount "excludes 734 crore EBITDA utilised for Finance Costs (Financial Lease, LC/BG Charges to banks and finance charges on payables to suppliers etc) for maintaining the Corporate Debtor (Essar Steel) as a going concern," the affidavit said.

The affidavit was filed following the directions of the appellate tribunal, which, on 7 May 2019, directed the RP of Essar Steel to submit the details of earnings from operations of the company during the corporate insolvency period.

The affidavit, however, said the "figures from 1 April 2019 till date are not available".

Insolvency resolution proceedings of Essar Steel had commenced on 2 August 2017 after the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, was admitted by the NCLT's Ahmedabad Bench.

The Committee of Creditors (CoC) had voted in favour of the 42,000-crore takeover plan of global steel major ArcelorMittal.

Later, the National Company Law Tribunal (NCLT) had also approved the ArcelorMittal’s resolution plan. However, it had asked the CoC to look into the issues of distribution of money to operational creditors of the company.

Operational creditors of Essar Steel are not satisfied with the CoC over the distribution of 42,000 crore coming from the resolution plan by global steel major ArcelorMittal.

The CoC of Essar Steel has divided operational creditors of the company into two categories — one with claims under 1 crore and another above 1 crore.

On 16 May, the CoC had informed the NCLAT that out of the 42,000 crore coming from the resolution plan of ArcelorMittal, 2,500 crore had been marked as the working capital of the debt-laden firm.

The CoC's submission before a National Company Law Appellatre Tribunal (NCLAT) implied that only 39,500 crore would be available for distribution among financial and operational creditors.

It had also informed the appellate tribunal that the actual upfront amount is 39,500 crore and the rest 2,500 crore has been committed as working capital for Essar Steel.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed

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