Essar Steel Auction: ArcelorMittal Moves Supreme Court Against Tribunal Order
New Delhi: ArcelorMittal on Monday moved the Supreme Court challenging the NCLAT order which held that Numetal's Rs 37,000 crore in second-round bid for Essar Steel was valid. The National Company Law Appellate Tribunal (NCLAT) had also asked the rival bidder ArcelorMittal to clear Rs 7,000 crore dues of its previously associated firms to qualify for the acquisition. "The petition challenging the NCLAT order has been filed," the counsel for ArcelorMittal said. The counsel said that the petition will be mentioned in a day or two for an urgent hearing.
The appellate tribunal, on September 7, had asked lenders, who are auctioning Essar Steel to recover over Rs 49,000 crore of unpaid loans, to consider the second round bids of Numetal and mining baron Anil Agarwal-led Vedanta. ArcelorMittal's bid will be considered if it pays dues by September 11, it had said.
For ArcelorMittal India (AMI), which was the only other bidder besides Numetal in round-1, the NCLAT held that it needs to remove the "stigma of defaulter" attached to it because of its previous 29 per cent stake in Uttam Galva Steel and KSS Petron.
The NCLAT held that the first round of bid by Russia's VTB Group-backed Numetal in February was ineligible as the firm was 25 per cent owned by Rewant Ruia, scion of Essar Steel's promoter Ruia family. But, he exited the firm before the second round of bid was submitted in March, making Numetal eligible.
NuMetal and steel tycoon Lakshmi Mittal-led ArcelorMittal had in February submitted separate bids to takeover Essar Steel. The Committee of Creditors (CoC), however, disqualified both bids saying their promoters were tied to companies, which were bank loan defaulters and so ineligible under Section 29A of the Insolvency and Bankruptcy Code. The second round of bids was called where JSW Steel joined NuMetal to put in a bid of Rs 37,000 crore, while Vedanta Ltd entered the fray as a third bidder. AMI too put in a bid.
Both NuMetal and Essar Steel had challenged disqualification of the first round of bids in the Ahmedabad-bench of the National Company Law Tribunal (NCLT), which did not give any relief to the bidders but has asked the CoC to take another look at the bids before disqualifying them. CoC sought a second round of bids by April 2.
The NCLT order was challenged by both the bidders in NCLAT. After the NCLT order, AMI had offered to repay any outstanding loans owed by Uttam Galva Steels Ltd, where it held promoter stake, and KSS Petron. The steelmaker had placed Rs 7,000 crore in an escrow account, with the condition that lenders disqualify Numetal's bid.
