BHUBANESWAR: The stage is set for another round of legal battle with operational creditors of Essar Steel feeling resentful over ArcelorMittal’s resolution plan. The state-owned gas utility GAIL (India) and Gujarat Energy Transmission Corp (GETCO) have moved the National Company Law Tribunal’s (NCLT) Ahmedabad bench seeking rejection of ArcelorMittal’s bid for Essar Steel, saying operational creditors have been left out in the proposal.
This comes a week after a group of 29 operational creditors moved the Ahmedabad bench of NCLT seeking payment of dues worth Rs 607 crore under the Insolvency and Bankruptcy Code. Claims of these operational creditors — including suppliers of ferroalloys, contractors and logistics service providers — had been verified by the resolution professional (RP) and admitted as dues payable in the Essar Steel case. The case is likely to come up for hearing on November 26.
While GETCO has made a claim of Rs 897 crore, GAIL said it has outstanding dues worth Rs 907 crore, of which about Rs 125 crore has been admitted in list of the company’s creditors. Last month, Essar Steel’s Committee of Creditors (CoC) had approved the resolution plan by ArcelorMittal, which offered to pay Rs 42,000 crore out of the total due of Rs 49,395 crore for creditors and Rs 8,000 crore in capex for Essar Steel. However, operational creditors said that only Rs 214 crore has been earmarked for them, against the outstanding of Rs 4,976 crore.
According to the GAIL petition, “The resolution plan submitted is in contravention of Section 30 (2) of Insolvency and Bankruptcy Code, 2016. That even otherwise resolution plan is neither legal nor proper in the interest of all creditors. The resolution plan is arbitrary, irrational and illogical, and puts in jeopardy the interest of operational creditors and completely fails to protect the interest of operational creditors.” They demanded that the company pay in full to all creditors or allow consideration of the Rs 54,389 crore proposal of the Essar Steel owners.