“Working capital is revenue generated from going concern. It cannot be added. ArcelorMittal cannot touch it. It's not their money,” senior advocate Kapil Sibal, appearing for the bank, said. Sibal further added that the bid of the company should have been Rs 46,000 crore, as the company had reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of nearly Rs 4,000 crore.
In an affidavit filed last week, Essar Steel’s resolution professional (RP) had told the NCLAT that the company had made an Ebitda of Rs 4,000 crore during the 600 days of corporate insolvency period that started on August 2, 2017. Apart from this, the company has also accounted Rs 229 crore as Ebitda for March 2018, the resolution professional told NCLAT.
“This amount excludes Rs 734 crore Ebitda utilised for finance costs such as financial lease, letter of credit, bank guarantee charges to banks, and finance charges on payables to suppliers for maintaining the Essar Steel
as a going concern,” the resolution professional's affidavit said.
During its submissions on Monday, ArcelorMittal had said that it would give Rs 42,000 crore as upfront payment. Like the CoC, ArcelorMittal had also said that of the total amount, a payment of Rs 2,500 crore as guaranteed working capital adjustment would also be included. The lenders of the company had also told the NCLAT last week that of the total amount of Rs 42,000 crore, only Rs 39,500 crore was meant for distribution. The ramaining Rs 2,500 crore had been kept aside as a minimum guarantee of profit for financial creditors, the CoC had told the appellate tribunal.