The committee of creditors in the Essar Steel bankruptcy case has sought the dismissal of two applications that could potentially delay debt resolution at the stressed steelmaker, for which ArcelorMittal has been chosen the winner by the lenders.
The interlocutory application, moved before NCLT Ahmedabad in this case, is generally used to seek urgent relief, or to bring fresh facts to the court’s knowledge.
The committee has also sought day-to-day hearing of other such applications, filed by operational creditors. A group of 30 vendors, who had supplied goods and services to Essar, came together to petition the NCLT’s Ahmedabad chapter asking for their dues worth more than Rs 600 crore. These dues are not promised to be repaid in the ArcelorMittal plan.
“….The application filed by the resolution professional of GPI Textiles is not maintainable,” the committee of creditors said in its submission before NCLT, citing a Supreme Court judgement. The committee is represented by law firm Shardul Amarchand Mangaldas.
ArcelorMittal’s expected acquisition of Essar Steel could face a further challenge over unpaid dues at GPI Textiles, a company promoted by LN Mittal’s brothers Pramod and Vinod Mittal, ET had reported on November 2.
The Insolvency and Bankruptcy Code (IBC) stipulates that promoters of defaulting companies and people “connected” to them are barred from participating in bids for stressed assets.
Jalesh Grover is the resolution professional of GPI Textiles and is represented by Nipun Singhvi, an Ahmedabad-based lawyer.
Essar Steel promoters also filed a caveat earlier this week, which works as a legal caution as well as buys the petitioner the right to be heard before a final order is given.
“It is submitted that the purported settlement proposal is nothing but another subterfuge being adopted by the promoters of the corporate debtor to derail the resolution process,” said the CoC application.
The 15-month-long battle for Essar Steel had seemed to reach a conclusion when the lenders almost unanimously voted in favour of ArcelorMittal’s resolution plan on October 25. The plan promised Rs 42,000 crore to creditors on outstanding debt of Rs 49,000 crore as well as an additional Rs 8,000 crore infusion in the company, taking the total offer to Rs 50,000 crore.
However, hours later, the Essar Steel promoters made a Rs 54,000-crore counter offer that seeks to pay back all creditors in full.
“It is expedient that all the concerned parties are issued direction to complete pleadings in an expeditious and time-bound manner so that the Plan Application and other related aspects/objections with respect to maintainable applications are heard expeditiously on a day to day basis,” the application said.
The GPI Textiles and Essar Steel approval plans will be heard on November 28 by the NCLT.
