The battle for Essar SteelBSE 0.41 % entered into a decisive legal phase with Arcelor Mittal, one of the two original bidders, deciding to file an application at the NCLT Ahmedabad challenging the March 23 decision of the resolution professional declaring its bid as ineligible. Arcelor’s rival bidder Numetal Mauritius, a consortium led by Russia’s VTB Bank, which too was disqualified, had earlier approached the NCLT on March 20 to reinforce its eligibility.
Essar’s Committee of Creditors (CoC) decided to invite bids from all those who had submitted EoIs before April 2. This includes Tata Steel, Nippon, SSG Capital and VedantaBSE 1.54 % Resources besides, ArcelorMittal and Numetal which had put in binding bids on February 12. The NCLT subsequently advanced its date of hearing on the Numetal application from April 4 to March 27 to ensure clarity before the close of deadline on the bids.
“ArcelorMittal said in a statement on Monday it has “always firmly believed and continues to believe that our strong and competitive bid for Essar Steel India, submitted on 12th February, was fully eligible and therefore should have been placed before the Committee of Creditors by the Resolution Professional.”
“However we received formal notification on March 23 that our bid was deemed ineligible due to the technicality of still being a promoter of Uttam GalvaBSE 1.95 % on the stock exchange, even though we had sold our shareholding before submitting our offer. Furthermore, the stock exchanges have confirmed that ArcelorMittal was declassified as a promoter of Uttam Galva,” the Arcelor statement added. “We have therefore today proposed a legal challenge to the decision of the resolution professional in the court in Ahmedabad. This is also critical in order to ensure we protect our rights in the process given the legal challenge by Numetal against the decision,” it said.
Numetal, a resolution applicant for ESIL, is a consortium led by VTB Capital of Russia with other key shareholders like, TyazhPromExports (TPE) and Indo International. Around 25% stake in Numetal is held by Aurora Trust– which has links to Rewant Ruia, Essar Steel co-founder Ravi Ruia’s son—and is a minority shareholder with no right to directorship and management of Numetal. In its application to NCLT, Numetal had said it apprehends that full facts submitted by it for determination of its eligibility to submit a Resolution Plan for Essar Steel have not been appropriately assessed. Accordingly, in the Application, all necessary facts for determining the eligibility of Numetal have been placed before the NCLT for an objective assessment.
Source: Economic Times