28 February 2019: The National Company Law Appellate Tribunal today asked the Ahmedabad bench of the National Company Law Tribunal to pass its final order in the Rs 42,000-crore resolution plan submitted by ArcelorMittal for the insolvent Essar Steel by March 8.
Earlier, the NCLAT had given time till Feb. 28 for the NCLT to deliver its final order in the case, stating that the appellate tribunal would take over from March 1.
In October 2018, the committee of creditors for Essar Steel had selected the Lakshmi Mittal-owned company as the winning bidder for the insolvent steelmaker. ArcelorMittal’s plan included payment of Rs 42,000 crore for financial creditors against their dues of over Rs 49,000 crore. The Ruia family, which owns the Essar Group, had at the time offered to settle all dues in the company with a settlement plan of over Rs 54,000 crore, which was rejected by the lenders.
On Jan. 29, the Ahmedabad bench of the NCLT said the promoters of Essar Steel don’t have the right to seek for a settlement of loans and said that only the parties that had filed the insolvency petition in the first place could settle the loans. State Bank of India and Standard Chartered Bank had approached the bench in August 2017 to file an insolvency petition against Essar Steel after the Reserve Bank of India asked banks to do so.
The NCLAT allowing more time to the NCLT to deliver a judgment on Essar Steel’s insolvency process has added to the already delayed procedure. The delays have been cause by multiple litigations filed by the Ruia family, operational creditors and other financial creditors in the insolvency proceedings for Essar Steel over the past 18 months. The case has dragged for over 500 days, longer than the 270-day deadline set for resolution under the Insolvency and Bankruptcy Code.
The Ahmedabad bench of the NCLT, on Thursday, decided that cases filed by eight, out of the 40 operational creditors who opposed the ArcelorMittal’s resolution plan, should be dismissed. The operational creditors whose cases have been dismissed are Orissa Stevdores, Kamaljeet Alhuwalia, Signode India, Timken India, Hind Aluminium Industries, Arkay Logistics, Essar Bul Terminal and Allied Metallurgical Products.
The NCLT is yet to pronounce an order on cases filed by the remaining 32 operator creditors. A detailed order of the NCLT is awaited.