NCLAT will hear appeals by various creditors and decide whether or not the resolution plan is discriminatory to different creditors.
The tribunal allowed Standard Chartered Bank to seek advice from the Insolvency and Bankruptcy Board of India (IBBI) on the average percentage of debt that financial and operational creditors are granted in various approved corporate rescue plans. Thus, the final resolution plan for Essar Steel will be subject to the tribunal’s final order.
The decision is expected to be a shot in the arm for the world’s largest steelmaker run by billionaire Lakshmi Mittal, who has been trying to enter the Indian market for more than a decade now.
“In the circumstance, we allow appellants to implead the Insolvency and Bankruptcy Board of India as a pro forma respondent and will inform the secretary of the Insolvency and Bankruptcy Board of India who may engage a lawyer to assist the appellate tribunal and may submit its opinion," said the order.
The next hearing on the matter is scheduled on 27 March.
Standard Chartered Bank, which is among the committee of creditors of Essar Steel, also challenged the order of the bankruptcy court as it was seeking a recovery of a higher share of dues than envisaged in the resolution plan.
ArcelorMittal’s resolution proposal provides financial creditors ₹41,987 crore out of their total dues of ₹49,395 crore. Operational creditors, under the plan, would get just ₹214 crore against the outstanding ₹4,976 crore. If ArcelorMittal’s plan is implemented, Standard Chartered will only get ₹60 crore against its claims of ₹3,187 crore from Essar Steel, PTI reported.
ArcelorMittal and Essar Steel did not respond to emails sent to them till publishing of this story.
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