Essar steel bid: NCLAT reserves order on Numetal and ArcelorMittal pleas

NCLAT on Wednesday reserved its order on the petitions filed by ArcelorMittal and Russia's VTB Capital-backed Numetal over issues pertaining to eligibility of their bids for taking over debt-ridden Essar Steel.

A two-member NCLAT bench headed by Chairman S J Mukhopadhaya has asked both the resolution applicants to file written submissions by Monday.

The National Company Law Appellate Tribunal concluded hearings on the petitions challenging their disqualification in the first round of bids.

On May 22, NCLAT had ordered status quo on insolvency proceedings of Essar Steel following the petitions. Both Numetal and ArcelorMittal put in bids in the second round after their offers in the first round were opined to be invalid.

Numetal faced disqualification as its 25 per cent stake was owned by Aurora Trust of Ruia family, the promoters of Essar Steel.

ArcelorMittal's first bid was rejected because of its holding in loan defaulting companies, Uttam Galva Steel and KSS Petron.

For the second round of bidding, VTB Bank sought to sever ties with the Ruia family by buying out Aurora Trusts stake in Numetal.

ArcelorMittal, on the other hand, transferred Rs 70 billion to an escrow account of SBI to clear outstanding loans of Uttam Galva and KSS Petron.

In the second round of bidding, Anil Agarwal's Vedanta Resources also joined the race. Besides, JSW joined Numetal for the bid.

Numetal said yesterday that Ruia family scion Rewant will never be in management of Essar Steel even though the rules do not bar blood relations of delinquent promoters from bidding for loan defaulter companies being auctioned to recover dues.

NCLAT had earlier also asked for confirmation that Rewant Ruia, as a shareholder of Numetal through AEL, does not have business or financial relation with Ravi Ruia for the purposes of Numetal's bid.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel