Essar Steel debt resolution under the Insolvency and Bankruptcy Code had crossed its initial 270- day deadline on April 29 and was extended to May 28

The National Company Law Appellate Tribunal on Tuesday ordered the resolution professional and Committee of Creditors of Essar Steel not to take any decision in the matter including that of liquidation till the next hearing slated on July 23.

Essar Steel debt resolution under the Insolvency and Bankruptcy Code had crossed its initial 270 day deadline on April 29 and was extended to May 28.
Now, the resolution process has been put on hold till July 23. On Tuesday, NCLAT was hearing the petition filed by both Russian VTB Bankpromoted consortium Numetal Mauritius and ArcelorMittal, the only contenders for the stressed Essar Steel asset which has already seen two rounds of bidding. While the CoC had declared both Numetal and ArcelorMittal as ineligible to bid for the Essar Steel asset and called for second round of bidding.

However, NCLT ordered the CoC to consider the first round of bidding and gave bidders a week’s time to cure deficiency. ArcelorMittal transferred ₹7,000 crore into an escrow account of State Bank of India to clear the defaulted dues of Uttam Galva and KSS Petron in which it had minority stake.

ArcelorMittal said it had addressed the concerns raised by the Committee of Creditors, while Numetal which was also given the opportunity to cure its first round offer failed to do so. In Numetal’s case, Essar Group coFounder Ra vi Ruia (father of Rewant Ruia who owns 25 per cent stake in Numetal) had issued guarantees to banks for loans taken by group companies. Though Numetal has removed Rewant Ruia as shareholder in the second round of bidding, it has to clear all the dues to become eligible in the first round. Numetal on Tuesday argued that the second round of bids should be opened as it had bid ₹37,000 crore and removed Rewant Ruia from the consortium. The Bench headed by Justice SJ Mukhopadhy ay admitted pleas filed by Numetal and ArcelorMittal
and posted the case  for hearing on July 23.

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