In an unexpected twist, the Ahmedabad bench of National Company Law Tribunal (NCLT) on Thursday asked for a review of the ArcelorMittal and Numetal bids presented in the first round of Essar Steel auction. The tribunal, in its ruling, observed that the CoC and RP had not followed the due process while deciding on the eligibility of Numetal and ArcelorMittal bids.
The bench asked the resolution professional (RP) and the Committee of Creditors (CoC) to evaluate the bids, including the resolution plans. The Tribunal also termed the invitation for the second round of bids, as invalid. The NCLT also reprimanded the RP and the CoC on the way they handled the resolution proposal.
It has also extended the deadline for the resolution of Essar Steel’s asset under the Insolvency & Bankruptcy Code (IBC) by 30 days to include the period of litigation.
The resolution professional had turned down the two bids, terming them ineligible under the Section 29A of the Insolvency and Bankruptcy Code (IBC). The section bars promoters of defaulting companies from bidding for stressed assets. It also prevents “connected persons” from putting in a bid.
Responding to the order, Numetal said “We welcome the order pronounced by NCLT Ahmedabad by returning the matter back to COC for considering our original bid. We have put forth a very compelling resolution plan both industrially and financially. We hope our proposal will be considered by the Committee of Creditors with a fair and holistic view. We are awaiting the detailed order before we can comment further.”
ArcelorMittal said in a statement soon after the NCLT’s order “We have always maintained that we are eligible to bid for Essar Steel and are pleased to see that the NCLT wants our offer to be presented to the committee of creditors. We had made a strong and competitive offer backed up by a detailed industrial plan and now hope for a swift resolution for Essar Steel.”
Source : Strategic Research Institute, SteelGuru