Arcelormittal gets conditional nod for its Essar Steel bid

THE RESOLUTION PROFESSIONAL CAN GO AHEAD WITH THE TURNAROUND PLAN FOR ESSAR STEEL

NEWDELHI:THE National Company Law Appellate Tribunal (NCLAT) on Monday gave conditional approval to Luxembourgbased Arcelormittal’s ₹42,000 crore bid to take over domestic steel producer Essar Steel.

The resolution professional can go ahead with the turnaround plan for Essar Steel involving its sale to Arcelormittal, but the share of proceeds that lenders and operational creditors are entitled to will be decided later, ruled the two-member bench headed by Justice SJ Mukhopadhaya.

NCLAT will hear appeals by various creditors and decide whether or not the resolution plan is discriminatory to different creditors.

The tribunal allowed Standard Chartered Bank to seek advice from the Insolvency and Bankruptcy Board of India (IBBI) on the average percentage of debt that financial and operational creditors are granted in various approved corporate rescue plans. Thus, the final resolution plan for Essar Steel will be subject to the tribunal’s final order.

The decision is expected to be a shot in the arm for the world’s largest steelmaker, which has been trying to enter the Indian market for more than a decade now. “In the circumstance, we allow appellants to implead the Insolvency and Bankruptcy Board of India as a pro forma respondent and will inform the secretary of the Insolvency and Bankruptcy Board of India who may engage a lawyer to assist the appellate tribunal and may submit its opinion,” said the order.

The next hearing on the matter is scheduled on March 27.

Arcelormittal and Essar Steel did not respond to emails sent to them till press time.