Essar Steel insolvency case: Numetal moves NCLAT against CoC



Source: THE INDIAN EXPRESS

Numetal on Thursday moved the National Company Law Appellate Tribunal (NCLAT) against the decision of committee of creditors (CoC) of Essar Steel that it needs to repay the existing debt of the steel firm before it is considered eligible to bid for its assets.

This is the second petition filed by the company in the NCLAT since the Ahmedabad bench of the National Company Law Tribunal (NCLT) passed its order on April 19. In its first petition before the appellate tribunal, Numetal has challenged the NCLT’s April order which had directed Essar Steel’s CoC and resolution professional (RP) to reconsider the first set of bids received from Numetal and ArcelorMittal, granting an additional 30 days for the resolution process. The NCLT had suggested that the two bidders be allowed an opportunity to rectify their bids to make them eligible.

Numetal held that the NCLT should not have given time to ArcelorMittal to rectify its bid.

Apart from Numetal’s two petitions, ArcelorMittal too had moved NCLAT earlier challenging the decision of the RP and CoC that cancelled its first bid.

While Thursday’s petition of Numetal will come up for hearing in the NCLAT on Friday, the earlier petition of Numetal as well as the one by ArcelorMittal will be heard on May 17.

Earlier this week, the RP, Satish Kumar Gupta, on behalf of the CoC, had notified both Numetal and ArcelorMittal that they would have to clear all dues within a week before their bids are considered to be eligible.

Numetal has maintained that the company is a fully eligible resolution applicant as per the Insolvency and Bankruptcy Code (IBC). Neither Numetal nor its shareholders have any loans overdue with any creditors in India, its spokesperson said, adding that Numetal’s other shareholders have already bought out Aurora’s shareholding in the company.

The RP and the CoC had earlier disqualified Numetal’s bid since one of the persons associated with the company, Rewant Ruia, is related to the promoters of Essar Steel. The shareholders of Numetal include Russia’s VTB Bank and engineering firm Tyazhpromexport, financial investor Aurora Enterprises (in which Ruia has an interest) and commodity trading company Indo International Trading.

Financial creditors have claimed close to Rs 49,000 crore from Essar Steel. Although it could not be confirmed how much Numetal would have to pay to make itself eligible, sources estimate it could be around Rs 40,000 crore. The RP had also disqualified ArcelorMittal’s bid since it was considered a promoter of Uttam Galva Steels and KSS Petron, both loan defaulters.

Source: THE INDIAN EXPRESS