Numetal and ArcelorMittal are eligible to bid for Essar Steel, says NCLAT

08/09/2018

new delhi: The National Company Law Appellate Tribunal (NCLAT) on Friday said that Numetal and ArcelorMittal are eligible to bid for Essar Steel. ArcelorMittal has three days to clear its dues and become a standard asset to bid for Essar Steel.
The tribunal has ordered that Committee of Creditors (CoC) should negotiate to get the highest value. With this, NCLT Ahmedabad bench order has been set aside.
Numetal had moved the National Company Law Appellate Tribunal against NCLT, which allowed ArcelorMittal to bid for Essar Steel by paying up dues within 30 days. ArcelorMittal had filed a separate appeal against being disqualified to bid for Essar Steel.
Numetal had told NCLAT that it was revising its bid for beleaguered steel giant Essar Steel. In court, Numetal has said that it is willing to offer Rs 370 billion for Essar Steel in the second round of bids.
The NCLT Ahmedabad Bench in the Essar order had recently sent the first bids from Numetal and ArcelorMittal back to the resolution professional (RP) and the CoC with a direction to place all the resolution plans before the initiation of fresh bids for consideration of the CoC, in the light of statutory provisions pointing to a 30-day cure period for payment for overdue, in the case of resolution applicants found to be ineligible under 29A (c).
Section 29A (c) bars a promoter of a non-performing asset for more than a year from submitting a resolution plan.
The NCLT Bench had observed that mere sale of shares and declassification by ArcelorMittal would not absolve them from their responsibility and pointed to payment of dues for Uttam Galva Steels and KSS Petron, NPAs for more than year, as a cure. However, it had asked the CoC to take an independent view on the issue of eligibility. The financial bids in the first round were opened at the marathon CoC meeting held on Tuesday and sources said that ArcelorMittal’s bid was higher than Numetal’s.
However, no decision on eligibility or fresh bids was taken. The next meeting was slated for April 27.
The CoC meeting was held on March 21 and both Numetal and ArcelorMittal were found ineligible. It also decided to go for a second round of bids. Bids were invited from the shortlisted expressions of interest due to time constraint, and apart from Numetal who was partnered by JSW Steel and ArcelorMittal, Vedanta, submitted a bid.
However, Numetal moved NCLT subsequently seeking a stay on the opening of the bids and the process remained stalled till the NCLT order, which said that the second round bids might have been prudent but not legally sound.

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