NEW DELHI: The long-drawn Essar Steel saga seems to be finally heading towards a denouement with the Ministry of Corporate Affairs, the nodal ministry for IBC, ready to hand over the management of the insolvent firm to AreclorMittal.
Official sources said the ministry is waiting for the written order from the Ahmedabad bench of National Company Law Tribunal (NCLT), which has approved the resolution plan of ArcelorMittal for Essar Steel. “We expect the written order to come in a day or two, after which the order will be issued for the management change in Essar Steel,” the official said, adding that the legal contentions against the takeover can continue even after it.
Even as the ministry is awaiting the written order from the NCLT bench to clear the order on management change in Essar Steel, the National Company Law Appellate Tribunal (NCLAT), which was scheduled to hear the petition moved by promoters of Essar Steel against NCLT Ahmedabad’s ruling, asked the promoters to first clear the whole of Essar Group’s debt and then come with a resolution plan for Essar Steel as per the Supreme Court judgement.
The promoters’ counsel sought a week’s time to come back. The bench had asked ArcelorMittal to consider revising its `42,000 crore bid, as the promoters of Essar Steel have proposed a resolution plan with a higher bid of `54,389 crore. However, the NCLAT bench, comprising chairman Justice S J Mukhopadhaya, is scheduled to meet Friday to deliver the final verdict.
While approving ArcelorMittal’s resolution plan, the NCLT has sought various exemptions such as stamp duty, fees, transfer charges, and so on. The tribunal held that it is not in a position to grant these exemptions and that the resolution applicant will have to make appropriate submissions to the respective departments of the government. The NCLT provided one year to ArcelorMittal to obtain various approvals and exemptions.
The bench also made some observations on the treatment of creditors and statutory concessions. It has disposed off several applications, most of which deal with claims made by various creditors, but made a case for a more equitable distribution of proceeds among financial creditors, in the ratio of 85:15 reiterating that Standard Chartered Bank, a dissenting financial creditor, be given equal footing with other financial creditors.