Ahmedabad Bench of NCLT Adjourns Essar Steel's Case Hearing till December 13

On Monday, after hearing the petitions filed by Essar Steel's Committee of Creditors (CoC), Resolution Professional (RP) and ArcelorMittal, the two-member Ahmedabad bench of the National Company Law Tribunal (NCLT) comprising Justice Harihar Prakash Chaturvedi and Justice Manorama Kumari, has deferred the case's hearing further till 13 Dec'18.

During the arguments the lender banks, as well as the Lakshmi Mittal-led ArcelorMittal, opposed the debt-settlement proposal made by the shareholders of Essar Steel (ESAHL, Essar Steel Asia Holding Ltd), claiming that it is against the Supreme Court order as well as against the provisions of the IBC (Insolvency and Bankruptcy Code).

The RP of bankrupt Essar Steel has also opposed the proposal of ESAHL which holds 72% shares in Essar Steel. The shareholders have submitted a proposal for settlement of the entire debt for an amount of approximately INR 54,389 crore.

The committee of creditors (CoC) had recently approved Arcelor Mittal's INR 42,000 crore bid for Essar Steel which was approved after fresh bids were invited following a directive from the Supreme Court in Oct'18. ArcelorMittal proposal of INR 42,000 crore, includes payment to the financial creditors of INR 41,987 crore out of the total dues of over INR 49,400 crore and payment to the operational creditors (OCs) of INR 214 crore against total outstanding of INR 4,976 crore.

While the CoC's legal representative has objected the sudden emergence of ESAHL with an offer to settle whole debt, at the time when the CoC had already approved a resolution plan submitted by LN Mittal-led ArcelorMittal, representative appearing or ArcelorMittal attacked ESAHL for its 'strategic silence' even when the corporate debtor was undergoing an insolvency proceeding.

After taking into consideration the views by these parties during the hearing on Monday the NCLT has kept the further hearing till 13 Dec'18.

Essar Steel, a 10 MnT steel plant in the western state of Gujarat, was among a dozen of India's biggest debt defaulters that were pushed to bankruptcy court last year by a central bank order aimed at clearing a USD 147 billion mountain of bad loans.