Creditors Approach NCLT Seeking Rejection of ArcelorMittal’s Takeover Bid

SEATTLE (Scrap Monster): More operational creditors have approached the National Company Law Tribunal (NCLT) seeking rejection of takeover bid submitted by ArcelorMittal towards acquisition of Indian Essar Steel assets. GAIL India and Gujarat Energy Transmission Corp (GETCO) had moved the NCLT last week. According to sources, more operational creditors are likely to soon approach NCLT. The Tribunal is scheduled to take up the hearing on November 26, 2018.

Last month, the Committee of Creditors (CoC) of Essar Steel had given final approval for the takeover bid with an overwhelming support of 92% of creditors, well above the required 66%. As per the bid, ArcelorMittal had agreed to pay INR 41, 987 crore of the dues of creditors. The plan had earmarked only INR 214 crores for operational creditors against an outstanding of nearly INR 5,000 crores.

Following this, 29 operational creditors including GAIL and GETCO filed applications in the Ahmedabad bench of NLCT against ArcelorMittal’s resolution plan. The petitions seek rejection of the resolution plan, claiming that it completely fails to protect the interests of operational creditors. With more creditors expected to file petitions, the total claims could surpass INR 2,500 crores, sources said.

It must be noted that Ruias-the erstwhile promoters of Essar Steel has proposed to clear all dues of the financial and operational creditors in a late attempt to retain the asset.