A worker works while sparks fly as molten steel is poured from a ladle at an arc furnace in the steel melting shop of the Jindal Steel & Power Ltd. plant in Raigarh, Chhattisgargh. (Udit Kulshrestha/Bloomberg)

Essar Steel: Operational Creditors With Dues Over Rs 1 Crore Appeal To ArcelorMittal For Payment

A forum of operational creditors with more than Rs 1 crore in admitted dues from Essar Steel appealed to ArcelorMittal, which is in the process of acquiring the debt-ridden company, to pay their dues as well.

Last October, a committee of Essar Steel creditors had picked ArcelorMittal to acquire the 10-million-tonne steel mill for more than Rs 42,000 crore. But the original promoters—the Ruias, made a counter bid with Rs 54,384-crore offer later and was rejected by the lenders and the resolution professional.

The National Company Law Tribunal Ahmedabad has been directed by the National Company Law Appellate Tribunal to conclude the process by March 8. The resolution process is nearing 600 days instead of the mandated 270 days.

ArcelorMittal’s resolution proposal also includes an additional Rs 8,000-crore of capital injection into the company to improve operational efficiencies, increase production and deliver enhanced levels of profitability.

In its appeal, a forum of operational creditors with more than Rs 1 crore of dues, said it is unfair that ArcelorMittal is not paying a penny to such creditors.

Also read: Arcelor Is Said to Offer $672 Million for Essar Power Plant

Essar Steel’s operational creditors with large dues include the national oil marketer Indian Oil Corporation Ltd. with more than Rs 3,500 crore of dues.

“Our appeal is that ArcelorMittal may graciously and voluntarily modify their offer a bit and pay us also if not in one go at least in installments, over the next 12 months,” the forum said.

Noting that the buyer is paying in full those operational creditors with less than Rs 1 crore dues, the forum said “it’s extremely discriminating and wholly arbitrary. The operational creditors with over Rs 1 crore dues are being singled out as if they are being punished. What crime have we committed?”

Essar Steel runs a 10-million-tonne steel mill at Hazira in Gujarat and owes more than Rs 49,000 crore to over two dozen banks led by the State Bank of India and has been under the bankruptcy proceedings since June 2017.

Also read: Central Bank Puts Bhushan Power, Essar Steel Accounts Up For Sale