As per the latest reports, joining the bandwagon of parties that are unhappy with the decision of Arcelor Mittal taking over Essar Steel, one of its creditors Standard Chartered Bank (SCB) has filed an interlocutory application in the bankruptcy court against a panel of lenders selecting ArcelorMittal to takeover debt-ridden Essar Steel, saying the decision was “illegal” and was taken without considering its claims.
SCB has more than 7.5% share in the creditors’ committee of Essar Steel and it has claimed that although principal amount of INR 2,646 crore has been lent to Essar Steel, the Committee of Creditors (CoC) has admitted only INR 60.71 crore for repayment to SCB out of the total auction proceeds of INR 42,000 crore.
The SCB’s petition has said that the manner of conducting the 21st CoC meeting dated 22 Oct’18 and e-voting on the voting resolutions approved on 24 Oct’18 and 25 Oct’18 is non transparent, flawed and illegal and was carried out with an intention to deny legal right to (SCB) to take an informed decision on the Revised Resolution Plan (of ArcelorMittal).
Apart from SCB, the other two operational creditors, GAIL India Ltd and Gujarat Energy Transmission Corp (GETCO) filed separate applications seeking rejection of ArcelorMittal’s bid saying the INR 42,000 crore project leaves out their claims.
Last month, CoC of Essar Steel picked ArcelorMittal’s INR 42,000-crore proposal to take over the debt-laden company by paying INR 41,987 crore out of total dues of INR 49,395 crore of financial creditors. Operational creditors, under the plan, are to get just INR 214 crore against the outstanding of INR 4,976 crore. Aggrieved over this about two dozen operational creditors filed separate interlocutory applications in the Ahmedabad-bench of NCLT.
Essar Steel, a 10 MnT steel plant in the western state of Gujarat, was among a dozen of India’s biggest debt defaulters that were pushed to bankruptcy court last year by a central bank order aimed at clearing a USD 147 billion mountain of bad loans.
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