According to the request for proposal (RFP) document for Essar Steel, the payment would have to be made within 30 days of order of approval, or else interest would be charged on the resolution amount at the marginal cost of funds-based lending rate (MCLR).
On December 15, the Supreme Court
set aside a National Company Law Appellate Tribunal (NCLAT) order that had put different classes of creditors — financial and operational — on a par. The apex court ruling paved the way for ArcelorMittal
to implement the resolution plan.
On Wednesday, the last of the impediments was cleared by the government as it approved a new set of amendments to the Insolvency and Bankruptcy Code (IBC). Primary among them was ring-fencing the corporate debtor from criminal proceedings against offences committed by previous management or promoters. The Mittals had sought indemnity of Essar Steel
from the past criminal liabilities.
will be jointly owned and operated by ArcelorMittal and Nippon Steel Corporation (Nippon Steel), Japan’s largest steel producer and the third largest steel producer in the world, in line with the joint formation agreement signed by the two companies.
According to the agreement, Arcelor will hold 60 per cent in the venture; the rest will be with Nippon Steel. Both companies
will have equal representation and voting rights on its board of directors.
The closing of the transaction will bring to an end the more than 800-day-long corporate insolvency resolution process. Essar was admitted to the National Company Law Tribunal on August 2, 2017.
It was one of the 12 NPAs mandated by the Reserve Bank for resolution under the Insolvency and Bankruptcy Code. Essar owes its lenders around Rs 49,000 crore.