India News
Search Web Directory
News Home
Essar Steel bidding: ArcelorMittal offers to repay Uttam Galva, KSS debt with riders
Posted on 17th May 2018
Mumbai: ArcelorMittal Netherlands BV’s transfer of Rs7,000 crore to settle the dues of Uttam Galva Steels Ltd and KSS Petron Pvt. Ltd is conditional on Essar Steel Ltd lenders accepting its bid for the company in the ongoing insolvency resolution process, two people aware of the matter said.

The multinational steelmaker on Tuesday transferred Rs7,000 crore into an escrow account maintained by the State Bank of India, which leads Essar Steel’s lenders, offering to settle the debt to prove its eligibility as a bidder.

The committee of creditors (CoC) is likely to submit their choice of ArcelorMittal to the National Company Law Appellate Tribunal (NCLAT) on 17 May. However, bankers and lawyers believe that the company’s conditional offer could be challenged on the grounds that such repayment should happen prior to the submission of the resolution plan.

Under Section 29 (A) of the Insolvency & Bankruptcy Code (IBC), a person shall be eligible to submit a resolution plan if such a person makes payment of all overdue amounts with interest and charges relating to non-performing asset accounts before submission of the resolution plan.

“The cure (payment) should have happened before the submission of expression of interest. ArcelorMittal had no intention of curing. Even now they have no cure. They have only given a conditional offer as a remedy. Therefore, they are not eligible. The condition for repayment is that it should be declared as the highest bidder. As of now there is no payment,” said a banker familiar with the matter.

On 19 April, the Ahmedabad bench of the National Company Law Tribunal (NCLT) had asked Essar Steel’s committee of creditors and the resolution professional to reconsider the bids submitted by ArcelorMittal and Numetal during the first round of bidding. Both the companies had failed the eligibility criteria laid down by CoC because of their links to the other companies that have defaulted on loans.

However, NCLT had 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.

The second banker mentioned said that during its presentation to the CoC, ArcelorMittal has maintained that they are “not liable” to pay the outstanding amount. “The company has not accepted the default of Uttam Galva and KSS Petron in the first plan. It has not even accepted that the bid is defective. Without prejudice to their rights to contest the decision of CoC, they deposited the money as a goodwill gesture and put a condition that it will be available to the creditors of Uttam Galva and KSS Petron provided they are declared as highest bidder,” he added.

Essar Steel owes about Rs45,000 crore to the lenders. ArcelorMittal’s bid for the stressed company is about Rs32,000 crore while VTB Bank-led Numetal consortium, the only other bidder in the first round of bids, offered to buy out the company for Rs18,000 crore.

A legal expert said putting a rider on clearance of dues is a violation of the insolvency code.

“The banks should reject such an offer that comes with riders pertaining to clearing of dues. This is an eligibility issue to be cleared at the threshold before any bid can even be considered. Awarding a bid cannot be a pre-condition to participate in the resolution process. There will be a very strong legal challenge to any such pre-condition as this is a not a matter of bilateral agreement between the lender and the bidders but a legal requirement,” said Ramesh Vaidyanathan, founder of Advaya Legal.

Related Companies: Essar Steel   

Other Latest News
Nokia to cut jobs in multiple countries after Alcatel-Lucent deal, 5G shift
Posted on 16th January 2019
Finnish telecommunication giant Nokia on Tuesday announced its plans to cut jobs, media reported.

Nokia gave 350 as a layoff target in Finland, and said the figures in France and Germany would be higher, but did not specify.

Govt won't share limited Iran oil with private refiners: Sources
Posted on 16th January 2019
India will not share the limited supply of Iranian crude allowed under a U.S. waiver from sanctions with private refiners, according to people with knowledge of the matter. That is a departure from the earlier practice of splitting exempted volumes.

The government has asked its four state refiners led by Indian Oil Corp. to share the entire 9 millions barrels of Iranian oil available every month under a 180-day waiver from U.S. sanctions, the people said, asking not to be identified.

Indiabulls Integrated up 5% as arm gets preliminary nod from IRDAI
Posted on 16th January 2019
Shares of Indiabulls Integrated have locked in the upper circuit of 5 per cent at Rs 332 apiece on the BSE after the company announced that Indiabulls Life Insurance Company got the preliminary nod from Insurance Regulatory and Development Authority of India (IRDAI).

“The Company’s wholly owned subsidiary, ‘Indiabulls Life Insurance Company Limited’ has received regulatory R1 acceptance from Insurance Regulatory and Development Authority of India (IRDAI) for its proposed life insurance business,” Indiabulls Integrated Services said in a regulatory filing.

Rupee opens flat at 71.06 against US dollar
Posted on 16th January 2019
The rupee opened 1 paisa lower at 71.06 against US dollar on Wednesday. In the previous session, the domestic unit declined 13 paise to close at one-month low of 71.05 amid strengthening greenback and surging crude oil prices.

It was the third straight session of loss for the rupee. The domestic currency on Monday plunged by 43 paise to close at nearly one-month low of 70.92 against the US dollar.

India Oil demand rises from 4-year low as cash ban impact fades
Posted on 12th January 2019
India’s oil demand growth in 2018 rebounded from the slowest pace in four years as the country recovered from the shock of a cash ban and the roll out of a national sales tax.

The nation’s consumption of petroleum products rose 4.1 percent to about 210 million tons, the Oil Ministry’s Petroleum Planning and Analysis Cell said Friday. Growth improved from the preceding year’s 2.7 percent expansion, the slowest pace since 2013, as consumption was severely affected by a cash ban that crippled economic activity.

» Post a FREE Classified Advertisement
Inviting Real Estate Agents, Job Placements Agents, Educational Institutes, Software Service Providers, Real Estate Builders, Marriage Bureaus, Travel Agents, Restaurant Owners, Health & Fitness Centers and other Local Businesses to Post a FREE Classified Advertisement on Classifieds Website.
Jobs in India India Real Estate Automobiles Matrimonials Beauty & Fitness

Add a comment for Essar Steel bidding: ArcelorMittal offers to repay Uttam Galva, KSS debt with riders
Please only use this form to enter comments on the above company. All comments are reviewed before they are displayed on the web site. Not all comments may be displayed. Check back with us to see if your comments have been displayed.
If you want us to email the comments posted by users, please Subscribe by email
Security Code*

Be the first person to write a business review for Essar Steel bidding: ArcelorMittal offers to repay Uttam Galva, KSS debt with riders

Most Read News

NSE algo trading case: 62 broking firms may have had preferential access to NSE servers

Mercedes-Benz India sales rises 1.4% to 15,538 units in 2018

Ford unveils new Explorer. What is different in new SUV?

Air India flying high: Passenger revenues up 17% at Rs 15,081 crore in April-December

Maruti Suzuki hikes car prices for select models from today

More India News

  India Web Directory
Business Profiles
Automotive Directory
IT/ITES/BPO Directory
Hotel Directory
Health Directory
Business Directory
Gems & Jewellery
Education Directory
Real Estate Directory
Agriculture Directory
Logistics Directory
Yellow Pages
NRI Guide
Photo Galleries
Global Web Directory
*** FREE India Classifieds
Order Premium Listings
Submit a Site
Business Reviews
About us
Link to us
Contact us
Google Search Keywords: India Catalog, IndiaCatalog, India Web Directory
    © 1999 - 2019
    All Rights Reserved
Privacy Statement