1 min read.Updated: 04 Feb 2019, 12:59 PM ISTKomal Gupta
NCLAT’s directive was issued while it was hearing a petition filed by the CoC of Essar Steel, through SBI against Satish Kumar Gupta
The Ruia family backed ESAHL holds 72% of shares in Essar Steel
New Delhi: The National Company Law Appellate Tribunal (NCLAT) on Monday directed the Ahmedabad bench of the National Company Law Tribunal (NCLT) to decide on the insolvency plea filed against Essar Steel (India) Ltd. by 11 February.
A two-member NCLAT bench headed by its chairperson Justice S.J. Mukhopadhaya said only after the matter had been heard at NCLT, Ahmedabad, would the appellate tribunal hear it on 12 February.
The NCLAT’s directive was issued while it was hearing a petition filed by the committee of creditors (CoC) of Essar Steel, through State Bank of India, against resolution professional Satish Kumar Gupta and others.
The appellate tribunal also asked the operational creditors to choose one representative as the bench will not be hear all of them individually.
Last week, the Ahmedabad bankruptcy court had turned down the bid by Essar Steel Asia Holdings Ltd (ESAHL) to regain control over the debt-laden Essar Steel, which came as a major setback to the promoter Ruia family.
The Ruias have been seeking withdrawal of the petition under Section 12A of the Insolvency and Bankruptcy Code (IBC) that allows it subject to approval by 90% of the creditors and the NCLT. Their offer was made on a day when more than 92% of creditors to Essar Steel voted in favour of handing over the company to ArcelorMittal Netherlands BV.
The Ruia family backed ESAHL holds 72% of shares in Essar Steel.The NCLT decision paves the way for ArcelorMittal to move closer to its plans for acquiring Essar Steel.
On 3 January, the NCLAT had directed the Ahmedabad bench of the NCLT to expedite the insolvency case filed against Essar Steel.
The financial creditors had voted in favour of the resolution plan of ArcelorMittal on 25 October. Essar Steel shareholders then proposed to pay all its lenders, including operational lenders, in full.
ArcelorMittal’s resolution plan envisages an upfront payment of ₹42,000 crore to lenders and an additional ₹8,000 crore towards capital expenditure.
Later, Standard Chartered Bank also approached the bankruptcy court challenging the resolution plan approved by the majority of the financial lenders. Standard Chartered, which has more than 7.5% weight in the voting process, voted against ArcelorMittal’s resolution plan.
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