IBC: NCLAT Reserves Order On Numetal And ArcelorMittal Pleas Over Essar Steel Bids
The National Company Law Appellate Tribunal today reserved its order on the petitions filed by ArcelorMittal and Russia’s VTB Capital-backed Numetal over issues pertaining to eligibility of their bids for taking over debt-ridden Essar Steel.
A two-member NCLAT bench headed by Chairman S J Mukhopadhaya has asked both the resolution applicants to file written submissions by Monday. The tribunal concluded hearings on the petitions challenging their disqualification in the first round of bids.
On May 22, NCLAT had ordered status quo on insolvency proceedings of Essar Steel following the petitions. Both Numetal and ArcelorMittal put in bids in the second round after their offers in the first round were opined to be invalid.
Numetal faced disqualification as its 25 percent stake was owned by Aurora Trust of Ruia family, the promoters of Essar Steel. ArcelorMittal’s first bid was rejected because of its holding in loan defaulting companies, Uttam Galva Steel and KSS Petron.
For the second round of bidding, VTB Bank sought to sever ties with the Ruia family by buying out Aurora Trusts stake in Numetal. ArcelorMittal, on the other hand, transferred Rs 7,000 crore to an escrow account of State Bank of India Ltd. to clear outstanding loans of Uttam Galva and KSS Petron. In the second round of bidding, Anil Agarwal’s Vedanta Resources also joined the race. Besides, JSW Group joined Numetal for the bid.
Numetal said yesterday that Ruia family scion Rewant will never be in management of Essar Steel even though the rules do not bar blood relations of delinquent promoters from bidding for loan defaulter companies being auctioned to recover dues. The tribunal had earlier also asked for confirmation that Rewant Ruia, as a shareholder of Numetal through AEL, does not have business or financial relation with Ravi Ruia for the purposes of Numetal’s bid.