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New Delhi, July 22
The Supreme Court today put on hold the sale of Essar Steel to ArcelorMittal as it agreed to hear the appeal filed by financial lenders against the NCLAT order, saying it would like to settle the issue “once and for all”.
A Bench of Justices RF Nariman and Surya Kant said the monitoring committee will continue its work till the case is heard on August 7.
“Once the Committee of Creditors (CoC) in their concerned wisdom had decided on division of assets, there should have been no re-distribution, like you are an Interim Resolution Professional (IRP). We would settle this issue once and for all,” the Bench observed at the outset.
The Bench was hearing a plea by CoC of Essar Steel challenging NCLAT’s July 4 order which approved steel tycoon Lakshmi Mittal-led ArcelorMittal’s Rs 42,000-crore bid for acquiring the debt-laden firm.
The CoC has sought quashing of the National Company Law Appellate Tribunal (NCLAT) order which had given financial creditors equal status with operational creditors in the distribution of the ArcelorMittal’s bid amount.
Essar Steel was auctioned under the new Insolvency and Bankruptcy Code (IBC) to recover Rs 54,547 crore of unpaid dues of financial lenders and operational creditors.
In its July 4 order, the NCLAT had said that financial creditors will get 60.7% of their admitted claims of Rs 49,473 crore, almost same as operational creditors.
The operational creditors with admitted claim amount of less than Rs 1 crore would get 100%, while above Rs 1 crore would get 60.26% and workmen and employees would get 100%.
The tribunal had said the CoC will have no role in the distribution of Rs 42,000 crore and allowed claims of the operational creditors such as Dakshin Gujarat, Gujarat Energy, Bharat Petroleum, Indian Oil, GAIL, ONGC, and the NTPC. — PTI
Was auctioned under IBC
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