(Bloomberg) -- An Indian court halted Vedanta Ltd.’s takeover process for Electrosteel Steels Ltd. after a challenge by Renaissance Steel Ltd., a rival bidder.
The National Company Law Appellate Tribunal has agreed to hear Renaissance Steel’s appeal against Vedanta’s revival plan for indebted Electrosteel on May 17, posing a legal hurdle for the first large steel defaulter to complete the bankruptcy process under India’s new laws.
“In the pendency of the appeal, the parties and the adjudicating authority will maintain status quo,” a two-member panel headed by Justice S.J. Mukhopadhaya said Tuesday. The tribunal also directed lenders to submit details of the top three bids for Electrosteel’s debt resolution.
Electrosteel last month emerged as the first big defaulter for which a debt resolution plan was approved by lenders and a bankruptcy court, after Vedanta secured the court’s approval to take over 90 percent of Electrosteel by paying 53.2 billion rupees ($800 million) through a mix of debt and equity.
Renaissance Steel has challenged the bankruptcy court’s approval for Vedanta’s plan. Renaissance’s lawyer S.N. Mukherjee said in court that lenders should have approved the company’s offer to pay around 60 billion rupees.
“We will see who can pay more,” Justice Mukhopadhaya told lawyers after giving the order.
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