INSUBCONTINENT EXCLUSIVE:
promoters of debt-ridden Essar Steel, the National Company Law Appellate Tribunal (NCLAT) on Monday approved a Rs 42,000 crore takeover bid
for the insolvent firm by the world's largest steel maker ArcelorMittal.A two-member bench, headed by Justice SJ Mukhopadhaya, directed
ArcelorMittal to deposit the amount with the Committee of Creditors (CoC) to complete the resolution process that has been in the bankruptcy
an appeal filed by Essar's promoters and Standard Chartered
Ruias had pleaded that their offer of Rs 54,389 crore was superior as it clears 100 per cent outstanding dues of both financial and
operational creditors.Sources said that while the NCLAT decision paves the way for ArcelorMittal to finally proceed and take over the
management of Essar Steel, a fresh legal challenge in Supreme Court may be mounted by the Ruia family to retain control of the steel
earlier plea in the Supreme Court last year was sent back to the NCLT.According to a resolution plan proposed by ArcelorMittal, financial
creditors will get Rs 41,987 crore out of their total dues of Rs 49,395 crore, while operational creditors would get just Rs 214 crore
against the outstanding of Rs 4,976 crore.While hearing the matter last week, the NCLAT suggested that all operational creditors below Rs 1
crore should get 100 per cent of the dues and so should the employees of Essar Steel
Only 90 per cent of Rs 42,000 crore should be allowed for financial creditors, it had said.In its order last week, the NCLT also asked
ArcelorMittal to offer 15 per cent of the upfront cash settlement of Rs 42,000 crore, or Rs 6,300 crore, to operational creditors.The
original resolution plan only offered Rs 196 crore to operational creditors against claims of Rs 4,976 crore
The NCLT order means financial creditors - the banks - will have to take a deeper haircut on the assets.If ArcelorMittal is finally able to
take control of Essar Steel, it would be the first major move of the entity to enter the Indian market where it first tried to set up a
steel facility more than a decade ago
ArcelorMittal's entry would also bring new product category to the steel market with its expertise in producing value added and special
new steel plant closer to the company's current pellet unit at Paradip in Odisha
The capacity of steel plant in Gujarat also may be ramped up to full scale of 10 million tonnes (mt) and further to 15 mt.Essar Steel is
among the largest single location steel producers with a 10 million tonnes per annum liquid steel capacity
The integrated facilities comprise hot rolling facilities, cold rolling facilities, plate mill etc, located in Hazira, on the western coast
20 mtpa spread across Vizag and Paradip
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