ArcelorMittal India will challenge the decision of Essar Steel Ltd.’s resolution professional to disqualify its bid in the insolvency proceedings currently underway.
The steelmaker received a letter from the resolution professional stating that its bid was being disqualified on technical grounds since it was still a promoter for Uttam Galva Steels Ltd., it said in a statement released today. ArcelorMittal India was a 29 percent shareholder and co-promoter in Uttam Galva Steel Ltd. that’s been declared a non-performing asset and is currently facing insolvency proceedings. That would make it ineligible for bidding under the amended bankruptcy law.
The Indian arm of the Luxembourg-based company, however, said its resolution plan was eligible in the form that it was first submitted on Feb. 12. Besides, stock exchanges have now confirmed that ArcelorMittal was declassified as a promoter of Uttam Galva, the steelmaker added.
The move to challenge the resolution professional’s decision is “critical in order to ensure we protect our rights in the process given the legal challenge by Numetal against the decision,” ArcelorMittal said in its statement.
ArcelorMittal India, along with VTB Bank-led Numetal Mauritius were deemed ineligible to bid for debt-ridden Essar Steel by the committee of creditors and the resolution professional last week. In a plea submitted before the National Company Law Tribunal at Ahmedabad on March 20 – a day prior to the lenders’ meet – Numetal said its resolution plan was not properly assessed by the resolution professional. The Mauritius-based entity also asked for a declaration of eligibility from the NCLT.
While the tribunal did not stay the resolution process, it asked the resolution professional and lenders to respond to Numetal’s claims. It also said that the NCLT’s order in the plea would be binding on the decision made by the lenders. A hearing in the matter is due tomorrow.
RECOMMENDED FOR YOU
POPULAR