Numetal moves NCLAT challenging its ineligibility to bid for Essar Steel

Ltd on Friday moved the National Company Law Appellate Tribunal (NCLAT) agaisnt an National Company Law Tribunal (NCLT) Ahmedabad bench order disqualifying its bid for Essar Steel Ltd for being ineligible under Section 29A of the Insolvency and Bankruptcy Code.

Numetal was disqualified on the ground that Rewant Ruia, son of Essar Steel promoter Ravi Ruia, is a beneficiary of a trust that backed Aurora Enterprises, which in turn held about 25% stake in Numetal.

NCLAT issued notices to a committee of Essar Steel creditors, the resolution professional running the auction of the company, and ArcelorMittal who was on caveat.

Numetal’s appeal would be heard on May 17 along with the cross appeal filed by it and the other disqualified bidder for Essar Steel, ArcelorMittal India Ltd.

On April 19, NCLT had dismissed the first round of bidding for Essar Steel on the ground that committee of creditors and the resolution professional did not follow the procedure prescribed under the insolvency code.

However, it ruled that ArcelorMittal and Numetal must clear debts in defaulting companies where they hold stakes before bidding for Essar Steel again.

Last week Numetal, backed by Russia’s VTB Capital, had challenged the same NCLT court order allowing rival ArcelorMittal to clear bank dues of associate companies so that it can become eligible to acquire Essar Steel.

ArcelorMittal on the other hand had challenged its own disqualification from bidding in appeal before NCLAT.

Essar Steel has a debt of ₹49,000 crore and was referred to NCLT in June last year.

NEWDELHI:Numetal