National Company law Tribunal (NCLT) on Friday cleared the ArcelorMittal’s ₹42,000 crore resolution plan for debt ridden Essar Steel’s takeover. The judgement by the NCLT’s Ahmedabad bench comes a week after NCLAT directed the NCLT (Ahmedabad bench) to take decision pertaining the resolution plan by March 8 or it will call records and deliver its judgement.
Earlier, the National Company Law Appellate Tribunal (NCLAT) asked the NCLT‘s Ahmedabad bench to decide over the pending resolution plan by ArcelorMittal for debt ridden Essar Steelof ₹42,000 Crore. The court in its judgement has given directive to the Ahmedabad bench to take a judgement by March 8. Now, the sudden judgement of NCLT (Ahmedabad) is seen as a aftermath of appellate tribunal ruling on 29th February.
Giving approval to the ArcelorMittal’s bid, NCLT said the tribunal can’t impose judicial view over banks’ wisdom. However, it asked the committee of creditors (CoC) to reconsider the distribution of dues.
Earlier on January 29, NCLT rejected a debt settlement proposal by Essar stating that it goes against the section12A of Insolvency and Bankruptcy Code(IBC). In its judgement NCLT said that the ₹54,389 Crore offer by the Essar Steel is much higher than the ArcelorMittal’s bid of ₹42,000 Crore for a debt resolution. This is not maintainable in the purview Section12A of IBC, 2016.
Esaar Steel is been reeling under debt and was seeking for the approval of a debt resolution plan proposed by ArcelorMittal.