Tribunal allows Vedanta to pay ₹5,320 cr upfront to Electrosteel

NEW DELHI: The National Company Law Appellate Tribunal (NCLAT) on Wednesday permitted Vedanta Ltd to make an upfront payment of ₹5,320 crore to the Committee of Creditors (CoC) of debt-ridden Electrosteel Steels India Ltd, according to its approved debt resolution plan.

However, 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).

The NCLAT asked the parties to “act in terms of the (resolution) plan”, which, effectively, vacated an earlier order passed by it asking Vedanta and its Committee of Creditors to maintain status quo in Electrosteel’s corporate insolvency resolution process.

Subsequently, if Vedanta’s bid is found to be in contravention of IBC, the lenders will revert the amount received, the appellate tribunal clarified.

A two-judge bench led by Justice SJ Mukhopadhyay was hearing an appeal by Renaissance Steel India Pvt Ltd, one of the unsuccessful bidders for Electrosteel, against an April 17 order of National Company Law Tribunal’s (NCLT’s) Kolkata bench, approving Vedanta Ltd’s ₹5,320 crore resolution plan for Electrosteel.

Renaissance Steel had contended that Vedanta was ineligible to bid under Section 29A of the IBC.