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MUMBAI : The committee of creditors (CoC) for EPC Constructions India Ltd (formerly Essar Projects India Ltd) has approved the resolution plan submitted by Mauritius-based investor Royale Partners Investment Fund, two people aware of the development said, requesting anonymity.

The development comes after the lenders of debt-ridden EPC Constructions rejected the offer submitted by ArcelorMittal SA, and called for fresh bids.

A Royale Partners spokesperson confirmed the development. “We have received approval from 73% of the CoC for our resolution plan submitted for Essar Projects India Ltd," the spokesperson said in an emailed response, without divulging further details. The resolution plan has also been placed before the National Company Law Tribunal (NCLT) for final approval.

On 31 December, Mint had reported that the lenders of EPC Constructions had called for fresh bids after rejecting an offer from ArcelorMittal SA because they found it too low. Initially, ArcelorMittal was the sole suitor, trying to pick up the debt-laden company at a 93% discount.

The Luxembourg-based firm had submitted a bid of 500 crore, against EPC Constructions’ outstanding loans of 7,268 crore.

The steel behemoth had also promised to bring in some equity at a later stage, which was conditional to the approval of its resolution plan. The proposal, however, was rejected as the lenders sought more cash upfront.

This is the second Essar group company, after Essar Steel, that ArcelorMittal had shown interest in acquiring. A wholly owned unit of Essar Projects Dubai, EPC Constructions is involved in building infrastructure projects, power plants and refineries, among others.

The steel major had hoped to use the EPC arm as an add-on to its purchase of Essar Steel, which has still not been finalized due to a long-drawn legal battle.

Lenders having exposure to EPC Constructions include IDBI Bank ( 1,117 crore), Central Bank of India ( 1,054 crore), UCO Bank ( 1,011 crore), Exim Bank ( 884 crore), Corporation Bank ( 722 crore) and Suraksha Asset Reconstruction Co. ( 642 crore).

It was referred to the bankruptcy court by IDBI Bank and was admitted under the IBC on 20 April 2018.

The banks had declared EPC Constructions a non-performing asset on 31 December 2014, and issued a demand notice on 8 November 2017, as per NCLT.

maulik.v@livemint.com

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