VEDANTA ALLOWED TO PAY ~53 BN FOR ELECTROSTEEL

The National Company Law Appellate Tribunal on Wednesday allowed Vedanta to make an upfront payment of ~53 billion to lenders for acquiring Electrosteel Steels. A two-member Bench said the payment would be subject to the outcome of the petition filed by Renaissance Steel, challenging Vedanta’s bid. The Bench also clarified if Renaissance Steel wins the case, the Committee of Creditors will have to return the money to Vedanta.

The NCLAT on Wednesday permitted Vedanta Ltd to make an upfront part payment of its ~53.3 billion bid to the Committee of Creditors (CoC) of Electrosteel Steels India Ltd.

Following this, the Anil Agarwal-owned company claimed in an announcement to the Bombay Stock Exchange that it has been allowed to take over the debtridden company.

If Vedanta is able to finally get through with the resolution plan, Electrosteel will be the second steel company to see completion of insolvency process after Tata Steel took control of Bhushan Steel earlier this month. This would also mean Vedanta’s foray into the steel business.

The appellate tribunal reserved its verdict on Vedanta’s eligibility to submit a resolution plan under Section 29A of the Insolvency and Bankruptcy Code (IBC).

It asked the parties to “act in terms of the (resolution) plan”, which amounts to it vacating an earlier order passed by it asking Vedanta and the CoC to maintain status quo. The tribunal said if Vedanta’s bid is found to be in contravention of the IBC, the lenders will revert the amount received.