Standard Chartered Plc too moved NCLAT against ArcelorMittal's Essar Steel bid. Its counsel contended the bank was being given only 1.7% of its total exposure to Essar Steel, while other lenders—part of the committee of creditors (CoC)—were recovering more than 85% of their dues.
A two-member bench headed by Justice S.J. Mukhopadhaya posted the matter for further hearing on 18 March. It also asked the State Bank of India-led CoC to bring a fresh distribution plan on that day.
"There cannot be any discrimination...all are equal," NCLAT told SBI.
The tribunal said all operatonal creditors with less than ₹1 crore exposure should get 100% of their dues and so should the employees of Essar Steel. Only 90% of ₹42,000 crore being offered should go to financial creditors.
NCLAT is of the view that the CoC cannot reserve 92% of the bid amount for financial creditors and leave just 4% for operational creditors.
The CoC, however, opposed proposal to give 10% to operational creditors, saying they had approved ArcelorMittal's bid for Essar Steel based on the money that secured lenders are able to recover from the insolvency process.
Without the recovery for secured lenders, the CoC wouldn't have approved the plan, the counsel appearing for the committee said, adding that it cannot be a lottery system for operational creditors. Financial creditors would be left with ₹37,800 crore if 10% of the bid amount is given to operational creditors.
ArcelorMittal has offered to pay Essar Steel lenders ₹41,987 crore for their total dues of ₹49,395 crore. Operational creditors would get only ₹214 crore against their outstanding of ₹4,976 crore. Standard Chartered, an operational creditor, will get ₹60 crore against its claims of ₹3,187 crore from 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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