India News
Search Web Directory
News Home
SC sets aside NCLAT order, paves way for Arcelor to acquire Essar Steel
Posted on 16th November 2019
The Supreme Court on Friday brought down the curtains on an epic battle for debt-laden Essar Steel, paving the entry of the world’s largest steel maker, ArcelorMittal, into the second-biggest steel market, India.

In a ruling that would have a far-reaching impact on cases under the Insolvency and Bankruptcy Code (IBC), the apex court has set aside the National Company Law Appellate Tribunal (NCLAT) order that put a different class of creditors — financial vis-a-vis operational creditors as also secured and unsecured financial creditors — on a par.

The apex court has relaxed the revised 330-day timeline for resolving stressed assets by diluting its mandatory nature and leaving a window open for the adjudicating authority/appellate tribunal to extend the time under certain circumstances.

The court has allowed ArcelorMittal to pay and distribute the Rs 42,000-crore bid amount in line with the resolution plan dated October 23 this year, amended and accepted by the committee of creditors (CoC) on March 27, also this year.

Lenders had amended the plan in March to pay an additional Rs 1,000 crore to operational creditors who had exposures above Rs 1 crore.

An ArcelorMittal spokesperson said: “We are very pleased with the judgment that our resolution plan has been approved. We look forward to the closing of the acquisition soon.”

The acquisition will make ArcelorMittal the fourth-largest steel player in the domestic market.

Sources indicated there was no timeline for paying financial creditors but it was expected to be completed in two weeks once paperwork and agreements were in place.

Resolution professional Satish Kumar Gupta said the judgment brought finality to the approval of the resolution plan of ArcelorMittal for Essar Steel, the largest account under the IBC, and opened the door for its implementation, which would result in inflows of more than Rs 42,000 crore to creditors.

Essar Steel was one of the 12 accounts mandated by the Reserve Bank of India (RBI) for resolution under the IBC. Essar owes financial creditors around Rs 49,000 crore, whose realisation makes it among the best resolutions on the RBI’s first list of non-performing assets.

The apex court order also appeared to bring closure to a battle for the company between the Ruias and ArcelorMittal, stretching for more than a year.

An Essar spokesperson said: “We wish ArcelorMittal and Nippon Steel the very best on their entry into the Indian market. They are acquiring a world-class facility in a market that has a long runway for growth.”

Gupta said challenges faced during the CIRP (corporate insolvency resolution process) included managing stakeholders for maximisation value, improving operations, and litigation in different forums, including by resolution applicants, under Section 29A of the IBC.

Section 29A was introduced to prevent defaulting promoters from bidding without paying overdues.

The promoter group had made attempts at regaining control of Essar Steel during the course of the past year. A settlement offer of around Rs 54,000 crore was made but rejected by the National Company Law Tribunal (NCLT).

Sapan Gupta, partner and national head of banking and finance, Shardul Amarchand Mangaldas and Co, which represented the CoC, said the order had been delivered by a three-judge Bench and was binding on all stakeholders, including the erstwhile promoters. The order has also settled several contentious issues around the IBC.

Sapan Gupta said the Supreme Court had accepted the distribution of proceeds as decided by the CoC, thereby establishing the primacy of financial creditors. “It will now resolve hundreds of IBC cases that are pending in the NCLT and NCLAT,” he said.

The NCLAT had proposed an equitable distribution of the bid amount, which meant sacrificing a large portion — from 91.99 per cent to 60.7 per cent of Rs 42,000 crore — in one of the prized assets under the IBC by the secured lenders.

The NCLAT had said since it (Essar) was not a distribution of assets from the proceeds of sales of liquidation, the resolution applicant could not take advantage of Section 53 to determine the manner in which distribution of the proposed upfront payment was to be made.

Other Latest News
IT raids in Delhi, Jaipur in tax evasion case against Rajasthan group
Posted on 13th July 2020
The Income Tax Department is conducting searches in four cities, including Delhi and Jaipur, in connection with a tax evasion case against a Rajasthan-based jewellery group, officials said on Monday.

They said the raids have been launched early morning in Delhi, Jaipur, Mumbai and Kota.

YES Bank declines for second straight day, slips 17% on heavy volumes
Posted on 13th July 2020
Shares of YES Bank extended their decline itnto second straight day, down 17 per cent to Rs 21.20 in the intra-day trade, on the BSE on Monday on the back of heavy volumes after the bank on Friday fixed floor price for its proposed follow-on public offer (FPO) at Rs 12 per share and a cap of Rs 13 per unit. In the past two trading days, the stock has tanked 20 per cent from a level of Rs 26.65 on the BSE.

Indiscipline will not be tolerated, says Rajasthan Congress chief Avinash Pandey
Posted on 13th July 2020
With the political logjam in Rajasthan continuously intensifying, the ruling Congress in the state has made it clear that it will not tolerate any indiscipline in the party.

The statement comes as the crucial Congress Legislature Party meeting is underway.

Sachin Pilot likely to be sacked from Congress but won't join BJP: Sources
Posted on 13th July 2020
With the political developments in Rajasthan intensifying after Deputy Chief Minister Sachin Pilot revolted against the Ashok Gehlot led government, the Congres party is likely to sack the former as the president of Rajasthan Congress.

Raghuveer Meena likely to be appointed as new Congress state president in place of Sachin Pilot, sources quoted by Zee News claimed.

Coronavirus Outbreak: With 28,701 cases in a day, India's COVID-19 tally tops 8.78 lakh; death toll 23,174
Posted on 13th July 2020
As the coronavirus cases in India continue to spread rapidly, India is now just behind the United States and Brazil in terms of the total confirmed cases as it already overtook Russia to take the third spot in the list of worst-hit nations in the world affected by the coronavirus disease (COVID-19). It is, therefore, also the biggest epicenter of the coronavirus disease pandemic in Asia.

With over 28,800 new cases reported in the last 24 hours, India's COVID-19 count on Monday crossed the 8.78 lakh-mark, while the death toll has crossed the 23,000-mark as well.

» 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 SC sets aside NCLAT order, paves way for Arcelor to acquire Essar Steel
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 SC sets aside NCLAT order, paves way for Arcelor to acquire Essar Steel

Most Read News

China has caused great damage to the US, rest of the world: Trump

US airlines reach deal on govt loans as Covid-19 threatens demand, jobs

Gold price slides Rs 188 to Rs 48,444 per 10 gm, silver is 48,870 per kg

United Airlines sending layoff notices to nearly half of its US employees

TikTok to exit Hong Kong market within days over new national security law

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 - 2020
    All Rights Reserved
Privacy Statement