Essar Steel‘s Committee of Creditors (CoC) is yet to decide over the proportion of money it has to give to operational creditors under the the resolution plan proposed by ArcelorMittal.
As per sources, State Bank of India (SBI) is yet to decide over the amount which has to be given to operational creditors and to decide over it, SBI will be meeting soon and is expected to decide over the issue by Saturday night.
The amount can be around ₹1000 crore and has to be paid out of ₹42,000 crore proposed by ArcelorMittal.
This comes after the apex tribunal’s (NCLAT) order where it asked the lenders to reconsider the distribution of dues, as Standard Chartered and operational creditors opposed the ArcelorMittal’s resolution plan on the ground that they are not getting justified amount. To which tribunal asked lenders to consider 85:15 formula suggested by NCLT Ahmedabad for the distribution of ₹42,000 crore.
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As per sources, lenders may agree to pay ₹1000 crore more to operational creditors compared to its earlier amount of ₹196 crore. This would come from working capital adjustment, which is higher than ₹2,500 decided during the approval of resolution plan. This would make sure that the operational creditors get ₹1,196 crore and financial creditors still make 92% of recovery.
However, CoC members are unanimous over the amount has to be paid to Standard Chartered Bank. As per the original resolution plan, the lender will get ₹60.71 crore against its claim of ₹3,487 crore. The lenders (CoC) are likely to move to Supreme court over this issue.
The long time debt resolution case of Essar Steel is a famous one and was one of the 12 cases selected by Reserve Bank of India (RBI) in August 2017 for the resolution under Insolvency and Bankruptcy Code (IBC).
Read Also: Essar Steel : NCLT gives approval to debt resolution plan of ₹42,000 by ArcelorMittal