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
Verdict allowing women into Sabarimala not the 'final word': Supreme Court
Posted on 5th December 2019

The Supreme Court on Thursday said its 2018 verdict allowing entry of girls and women of all ages into the Ayyappa temple at Kerala's Sabarimala was not the final word as the matter was referred to a larger bench.

The apex court's observation came when senior advocate Indira Jaising, appearing for a woman devotee, Bindu Ammini, alleged violation of the 2018 verdict and said her client was attacked for her bid to enter the shrine.

Hyundai plans to bring fuel cell cars to India, Nexo could be first launch
Posted on 5th December 2019

Korean auto major Hyundai is planning to bring fuel cell electric vehicles to India. The company has already started a feasibility study as part of the plan.

Hyundai Nexo, which is already available in many markets, could be the first launch. The company claims Nexo is the world's first dedicated hydrogen-powered SUV and that it has a range of close to 380 miles, highest for any fuel-cell or electric vehicle in the market.

HDFC AMC slips 5% as Standard Life to sell additional stake via OFS
Posted on 5th December 2019

Shares of HDFC Asset Management Company (AMC) dipped 5 per cent to Rs 3,173 in intra-day deals on Thursday, after the company said it will use a greenshoe option for sale of additional 0.86 percent stake via offer for sale (OFS). The stock had ended 3 per cent lower at Rs 3,329 on the BSE a day earlier.

With the past two day's decline, HDFC AMC has corrected 17 per cent from its all-time high of Rs 3,844 touched on November 22, 2019.

RBI surprise: Repo rate left unchanged; FY20 GDP forecast lowered to 5%
Posted on 5th December 2019

Springing a surprise, the monetary policy committee of the Reserve Bank of India (RBI) maintained the repo rate at 5.15 per cent points (bps) in its fifth bi-monthly monetary policy meeting of the financial year 2019-20 (FY20) on Thursday. However, GDP growth forecast for FY20 was slashed to 5 per cent from 6.1 per cent.

The three-day rate-setting meet started on Tuesday (December 3). In its October meet, the RBI had cut interest rate by 25 bps to 5.15 per cent.

Polycab India hits fresh record high; stock zooms 100% from August low
Posted on 5th December 2019

Shares of Polycab India continued their upward journey, and hit a new high of Rs 1,052, up 6 per cent on the BSE on Thursday, on expectation of strong earnings going forward. The company was included in the MSCI Global Small Cap Index with effect from November 26, 2019.

The stock of the fast moving electric goods (FMEG) company zoomed 100 per cent from its recent low of Rs 525, touched on August 22, 2019.

» 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

YES Bank gains 6% ahead of board meet today to consider fundraising

Adani Group shares rally; Adani Gas, Adani Transmission surge 12%

India's banks wrote off Rs 2 trillion worth of bad loans in 2018-19

Month after results, Uddhav Thackeray takes oath as Maharashtra CM

Dilip Buildcon bags Bundelkhand Expressway Project worth Rs 1,362 cr in UP

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