The National Company Law Appellate tribunal (NCLAT) said the Essar group’s resolution plan bid for Essar Steel would only be accepted if the company would pay all the debt of Essar Steel.
This had added new twist to earlier almost finalized resolution bid of ₹42,000 crore bid by ArcelorMittal which a week earlier received yes nod from Ahmedabad bench of National Company Law Tribunal (NCLT).
The NCLAT bench led by justice SJ Mukhopadhaya said to the Essar group that, “Think of ₹80,000 crore more, we will make some room for you, whatever the amount is.We may consider (the Essar Group proposal) if (you pay) whatever — ₹80,000 or ₹90,000 (crore) — dues you have plus ₹54,000 crore (for Essar Steel).”
Now this index to the fact that the tribunal may reconsider the earlier resolution bid of Ruia’s led Essar group if they can pay all the bad debt of the group.
Along with this, the bench also asked ArcelorMittal why it should not be paying more for the asset and also asked if some other party(Essar Steel) is ready to pay ₹54,000 crore than why cant you (ArcelorMittal). The new developments in the case came during the hearing of the appeal filed by Essar Group (Essar Steel Asia Holdings) against the NCLT Ahmedabad judgement in which it approved the bid of ArcelorMittal.
All of this is due to a key section of the Insolvency and Bankruptcy Code (IBC) which excludes erstwhile promoters (Ruia’s) from bidding for assets so that they don’t get a chance to regain control after having defaulted on loans.
The Essar steel plan has been going on from last two years and as of now seems to be no where close to end.