ArcelorMittal moves NCLT over rejection of bid for Essar Steel
Mumbai: Steel maker ArcelorMittal has challenged the committee of creditors’ (CoC) decision to declare it an ineligible resolution applicant for Essar Steel Ltd, despite it taking required corrective actions to become compliant.
The firm on Monday filed a petition at the Ahmedabad bench of the National Company Law Tribunal (NCLT), seeking redressal for being disqualified on grounds of a “technicality”, it said in an emailed statement.
ArcelorMittal’s bid was disqualified on technical grounds as it continued to be a promoter of Uttam Galva Steels Ltd on paper during the bidding process despite offloading its stake in the debt-ridden firm on 8 February. The bidding deadline was 12 February. The case will be heard by the tribunal on Tuesday.
Uttam Galva features in the second list of defaulting firms issued by the Reserve Bank of India (RBI) to the lenders for referral to NCLT for resolution under the Insolvency and Bankruptcy Code.
On 22 March, Uttam Galva’s request for reclassifying ArcelorMittal as a public shareholder was accepted by the stock exchanges.
“ArcelorMittal has always firmly believed and continues to believe that our strong and competitive bid for Essar Steel, submitted on 12 February, was fully eligible and therefore should have been placed before the committee of creditors by the resolution professional. However we received formal notification on 23 March that our bid was deemed ineligible due to the technicality of still being a promoter of Uttam Galva on the stock exchange, even though we had sold our shareholding before submitting our offer,” the firm said in the statement.
It added that the petition is “also critical in order to ensure we protect our rights in the process, given the legal challenge by Numetal against the decision”.
Separately, Numetal Mauritius has also filed a petition in the Ahmedabad NCLT challenging the CoC’s decision of disqualifying its bid.
The matter will be heard on Tuesday as well.
Numetal’s bid has been disqualified on account of Aurora Enterprises Ltd, controlled by a trust owned by Rewant Ruia, holding a 25% stake in the company.
Rewant Ruia is the son of Ravi Ruia, vice-chairman of Essar Group.
Six firms submitted expressions of interest for Essar Steel. However, only two firms—Numetal Mauritius and ArcelorMittal—submitted bids.
Both bids were disqualified on grounds cited in section 29(a) of the IBC which prohibits related parties of defaulting firms from participating in the resolution process.livemint