NCLAT rejects Ruias’ plea challenging Arcelor’s bid for Essar Steel

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New Delhi, July 4 (IANS) The National Company Law Appellate Tribunal (NCLAT) on Thursday rejected Essar Steel promoter Prashant Ruia’s plea against the Rs 42,000 crore bid of ArcelorMittal to acquire the insolvent steel company.

The NCLAT said that financial creditors are one class of creditors and have to be treated similarly. It also noted that the Committee of Creditors does not have the authority to decide on the distribution of the bid amount, and it is the insolvency resolution professional who will decide on it.

The appellate tribunal also said that distribution of amount to the operational and financial creditors should be be reflected in ArcelorMittal’s resolution plan.

Commenting on the judgement, an Essar spokesperson said: “It appears that new facts regarding ineligibility under Section 29A (of the Insolvency and Bankruptcy Code), which emerged only after the previous judgement of the Supreme Court, have not been given due consideration. We are awaiting the detailed order and will decide our course of action thereafter.”

Sources, however, said that Ruia may again move to the Supreme Court against the approval to ArcelorMittal’s bid.

According to its resolution plan for Essar Steel, ArcelorMittal would provide Rs 41,987 crore to the financial creditors out of their total dues of Rs 49,395 crore. Operational creditors, under the plan, would get Rs 214 crore against the outstanding Rs 4,976 crore.

–IANS

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