There seem to no end to the twists in Essar Steel’s insolvency case. Now as per the latest updates after Ahmedabad bench of NCLT (National Company Law Tribunal) rejected Ruias bid for Essar Steel last week stating that the offer violates Section 12A of the Insolvency and Bankruptcy Code (IBC), Ruias have filed a fresh application with NCLT on 1 Feb citing Supreme Court’s order with regards to insolvency case of ‘Ruchi Soya’ announced on 31 Jan’19.
The order states that the directors of the company facing insolvency should be consulted by the lenders (Committee of Creditors) before arriving at a resolution. Based on this order, Ruias have made four more demands:
• To set aside the decision taken by the creditors to accept ArcelorMittal’s offer;
• To provide the applicants (the three directors) with all resolution plans submitted by potential applicants, which were considered and deliberated by the CoC;
• To provide applicants “with such other documents required for proper deliberations of the resolution plans submitted by potential resolution applicants;”
• To pass appropriate orders to direct the resolution professional to convene a meeting of the CoC and consider afresh resolution plans.
Ruias are hopeful that this order will give them more time to retain Essar Steel. However, they have not yet challenged the NCLT’s rejection decision of Ruias’ bid as the promoters are waiting for the cases, related to operational creditors moving the NCLT, to be first sorted.
Meanwhile, Delhi-based NCLAT (National Company Law Appellate Tribunal) has directed NCLT to decide on the resolution plan for Essar Steel on or before February 11. This directive came while hearing a plea by lenders to the steel company asking the court to expedite the process for resolution which has been ongoing for the last one-and-a-half years.
More than 90% of lenders to Essar steel company have voted in favor of ArcelorMittal’s resolution plan on October 25. The plan promised INR 42,000 crore to creditors on outstanding debt of INR 49,000 crore as well as an additional INR 8,000 crore infusion in the company, taking the total offer to INR 50,000 crore. However, the Ruia family, promoters of Essar Steel made a INR 54,000-crore counter offer that seeks to pay back all creditors.
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