NEW DELHI: Steel tycoon Lakshmi Mittal-led ArcelorMittal and Russia’s VTB Capital-backed NuMetal can bid for Essar Steel provided they clear their non-performing assets (NPAs) in two weeks, the Supreme Court said.
The apex court modified the National Company Law Appellate Tribunal (NCLAT) order that had found ArcelorMittal ineligible to participate in the bidding process for Essar Steel unless it cleared the Rs 7,000-crore loan defaults by Uttam Galva and KSS Petron Ltd.
With regard to NuMetal, it has not specified NPAs of its related corporate debtors which have to be paid off to become eligible to bid for Essar Steel.
The top court also asked the Committee of Creditors (CoC) to take a decision within eight weeks on rival bids of NuMetal and ArcelorMittal for Essar Steel. It held that if nothing materialises within eight weeks, then Essar Steel shall go into liquidation.The first round of bidding by ArcelorMittal and Numetal was rejected by the CoC, led by SBI and Standard Chartered Bank, for being associated with firms classified as defaulters, thereby violating Section 29(A) of the Insolvency and Bankruptcy Code.
While ArcelorMittal’s bid was rejected on the grounds that two firms associated with it were defaulters, NuMetal’s bid was turned down rejected as Essar Steel promoter Ravi Ruia’s son Rewant held 25 per cent stake in the consortium bidding for his family’s property. The Ruia family is the promoter of Essar Group companies.
The apex court noted that despite Rewant’s exit, his presence continued in the consortium which was bidding for Essar.