SC to hear ArcelorMit­tal plea against NCLAT or­der to­day

Financial Chronicle - - FUNDAMENTALS, POLITICS - FC BUREAU

The Supreme Court will hear to­day an ArcelorMit­tal plea chal­leng­ing the NCLAT or­der that asked it to pay by Tues­day Rs 7,000 crore to be­come el­i­gi­ble to bid for Es­sar Steel.

A bench of Chief Jus­tice Di­pak Misra and Jus­tices A M Khan­wilkar and D Y Chan­drachud said, "We will hear the mat­ter to­mor­row (Wed­nes­day)".

The mat­ter came up be­fore the apex court on Tues­day, a day af­ter steel ty­coon L N Mit­tal-pro­moted group made a bid of Rs 42,000 crore for Es­sar Steel.

ArcelorMit­tal has moved the apex court chal­leng­ing the NCLAT or­der of Septem­ber 7 by which it had held as el­i­gi­ble the sec­ond bid of NuMetal, a con­sor­tium of Rus­sia's VTB-JSW, for Es­sar Steel. The Na­tional Com­pany Law Ap­pel­late Tribunal (NCLAT) had asked ArcelorMit­tal to clear the stigma of de­faulter by clear­ing the dues of its sub­sidiaries. The NCLAT had last Fri­day ruled that NuMetal's sec­ond bid for Es­sar Steel is el­i­gi­ble but the same by ArcelorMit­tal will qual­ify only if it clears the Rs 7,000 crore dues of firms it was pre­vi­ously associated within three days. In­vestors re­acted neg­a­tively to ArcelorMit­tal’s re­vised bid for Es­sar Steel, rea­son­ing that it is over­pay­ing for the In­dian com­pany. ArcelorMit­tal shares fell more than 2 per cent in London on Tues­day.

One London-based an­a­lyst said the price in dol­lars per tonne of ca­pac­ity was about twice that pro­posed in ArcelorMit­tal's bid for sim­i­larly sized Ital­ian steel­maker Ilva. ArcelorMit­tal has agreed to pay 1.8 bil­lion eu­ros for Ilva and will in­vest an ad­di­tional 2.3 bil­lion eu­ros on pro­duc­tiv­ity and pol­lu­tion con­trols com­pared to the $5.78 bil­lion plus $1 bil­lion (Rs 7,000 crore) it has of­fered for Es­sar .

ArcelorMit­tal’s had fist made a bid for Es­sar Steel in Fe­bru­ary, when NuMetal also bid, but the com­mit­tee of cred­i­tors (CoC) had dis­qual­i­fied both the bids say­ing their pro­mot­ers were tied to com­pa­nies which were bank loan de­fault­ers and hence in­el­i­gi­ble un­der Sec­tion 29A of the In­sol­vency and Bankruptcy Code (IBC). The sec­ond round of bids was called, where JSW Steel joined NuMetal to put in a bid of Rs 37,000 crore, while Vedanta en­tered the fray as a third bid­der. ArcelorMit­tal too had put in a bid. The NCLAT held that the first round of bids were not el­i­gi­ble but NuMetal's sec­ond bid sub­mit­ted on March 29, af­ter re­struc­tur­ing the share hold­ing, was el­i­gi­ble. It had asked ArcelorMit­tal to clear the dues of Ut­tam Galva Steel and KSS Petron by Septem­ber 11 for its bid to be con­sid­ered el­i­gi­ble. The tribunal or­dered the com­mit­tee of Es­sar Steel cred­i­tors to get the high­est value, in­clud­ing by ne­go­ti­at­ing with the el­i­gi­ble bid­ders, ex­pe­di­tiously.

Both NuMetal and Es­sar Steel had ini­tially moved the Na­tional Com­pany Law Tribunal (NCLT)-Ahmed­abad chal­leng­ing the dis­qual­i­fi­ca­tion of the first round of bids. The NCLT had re­fused to give any re­lief to the bid­ders but asked the CoC to take an­other look at the bids be­fore dis­qual­i­fy­ing them.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.