The National Company Law Tribunal (NCLAT) on Thursday cleared the deck for ArcelorMittal’s takeover of Essar Steel, rejecting plea of the current promoters, the Ruias, and said lenders and operational creditors to the steelmaker will share the sale proceeds proportionately. Bloomberg reported that Essar Steel’s financial creditors will get 60.7% of their claims, while operational creditors will get around 60% of their claims. This means financial creditors will get around ₹30,030 crore (total claims ₹49,473 crore) and operational creditors will get ₹3,055 crore (total claims ₹5,092 crore). An Essar Steel spokesperson said, it appears that new facts regarding ineligibility under Section 29A, which emerged only after the previous judgement of the Supreme Court, have not been given due consideration. According to a PTI report on 15 May, Prashant Ruia, promoter of Essar Steel, submitted before the NCLAT that the resolution plan of ArcelorMittal was in violation of the Insolvency & Bankruptcy Code.

Source: Mint July 04, 2019 10:52 UTC