Essar Steel case: Will pay Rs 42k crore for the takeover, ArcelorMittal tells NCLAT

Essar Steel case: Will pay Rs 42k crore for the takeover, ArcelorMittal tells NCLAT

Refuting claims by Standard Chartered Bank that it was only paying Rs 39,500 crore for taking over the debt-ridden Essar Steel, ArcelorMittal on Monday informed the National Company Law Appellate Tribunal (NCLAT) that its resolution plan involves Rs 42,000-crore cash payment, which includes Rs 2,500-crore working capital.

“We are paying Rs 42,000 crore in cash. A wrong impression is being given that it is not. We are also paying a minimum guarantee of Rs 2,500 crore as working capital.

Only for accounting purposes, we say Rs 2,500 crore as working capital. It is an accounting thing,” senior counsel Harish Salve, appearing on behalf of ArcelorMittal, said.

Salve also accused the former promoters of Essar Steel — the Ruias — of creating hurdles in the resolution process of the bankrupt steelmaker.

According to the counsel, issues related to alleged non-performing assets of the companies of Lakshmi Mittal’s brother have already been dealt with and rejected by the Supreme Court.

Salve further submitted that NCLT and lenders would decide over the distribution of funds among the creditors of Essar Steel. He added that the distribution should be “equitable” between financial creditors and operational creditors.

NCLAT would continue to hear the Essar Steel insolvency case on May 21.

ArcelorMittal was to bring in `2,500 crore as working capital for Essar Steel whether or not Essar Steel makes profit during the resolution period. Since the company has earned around `3,500-crore Ebitda in the interim, ArcelorMittal will have to pay an additional `1,000 crore, which means it will have to fork out a total of `43,000 crore for the acquisition, Salve said.