The NCLAT today reserved its order on the petitions filed by world's largest steel manufacturer ArcelorMittal and Russia's VTB Capital-backed Numetal over issues pertaining to eligibility of their bids for taking over debt-ridden Essar Steel.
A two-member NCLAT bench headed by Chairman S J Mukhopadhaya has asked both the resolution applicants to file written submissions by Monday.
The National Company Law Appellate Tribunal concluded hearings on the petitions challenging their disqualification in the first round of bids.
During the proceedings, both sides along with CoC and RP were represented by prominent lawyers including Harish Salve, Abhishek Manu Singhvi, Mukul Rohatgi, Mihir Thakore, Darius Khambatta and Sudipto Sarkar.
While reserving its judgement, NCLAT asked ArcelorMittal if they are willing to pay the full dues of Uttam Galva and KSS Petron till date (amounting to excess of Rs 7,000 crore) without any condition in order to become eligible to submit resolution plan for Essar Steel.
NCLAT noted that ArcelorMittal was the promoter of Uttam Galva and KSS Petron when these accounts became NPA and will decide whether such stigma can be cured by payment at this stage of the overdue amounts.
Numetal's eligibility is linked to the shareholding of AEL (beneficially owned by Rewant Ruia), which has already exited from Numetal. While, issuing a statement, ArcelorMittal said that with its partner Nippon Steel and Sumitomo Metal, it continues to believe that it is not only eligible to bid for Essar Steel but also the best qualified bidder.
"In February, we offered a competitive resolution plan for Essar Steel that set out a positive future for the bankrupt company. We are hopeful for a fair and credible implementation of a bankruptcy code that lies at the heart of a potentially resurgent India," said ArcelorMittal.
On May 22, NCLAT had ordered status quo on insolvency proceedings of Essar Steel following the petitions. Both Numetal and ArcelorMittal put in bids in the second round after their offers in the first round were opined to be invalid.
Numetal faced disqualification as its 25 per cent stake was owned by Aurora Trust of Ruia family, the promoters of Essar Steel.
ArcelorMittal's first bid was rejected because of its holding in loan defaulting companies, Uttam Galva Steel and KSS Petron.
For the second round of bidding, VTB Bank sought to sever ties with the Ruia family by buying out Aurora Trusts stake in Numetal.
ArcelorMittal, on the other hand, transferred Rs 7,000 crore to an escrow account of SBI to clear outstanding loans of Uttam Galva and KSS Petron.
In the second round of bidding, Anil Agarwal's Vedanta Resources also joined the race. Besides, JSW joined Numetal for the bid.
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