NCLAT to deliver verdict on Numetal, ArcelorMittal in Essar case today

Essar Steel
The National Company Law Appellate Tribunal (NCLAT) will deliver its order on issues relating to the eligibility of Numetal and ArcelorMittal, the two bidders for Essar Steel in the first round, on Friday. The judgment is expected to resume the process of debt resolution in one of the first of Reserve Bank of India's big-ticket cases recommended for debt resolution under the Insolvency and Bankruptcy Code (IBC). Essar owes lenders around Rs 490 billion.

In May, the NCLAT had put on hold the resolution process for Essar Steel. The appellate tribunal had asked the resolution professional, the committee of creditors (CoC) and the National Company Law Tribunal (NCLT) to refrain from passing any order in the matter related to the insolvency resolution of Essar Steel, including liquidation.

The stipulated 270-day deadline for resolution under the Insolvency and Bankruptcy Code (IBC) for Essar Steel ended on April 29. However, the NCLT Ahmedabad Bench had excluded the period when the application was filed in the tribunal and the order was pronounced, which too ended on May 28.

Battle for Essar

  • August 2, 2017: Corporate Insolvency Resolution Process is initiated
  • October 23, 2017: Tata Steel Ltd, Numetal Mauritius, Nippon Steel & Sumitomo Metal Corp, Vedanta, Arcelor Mittal and Steel Authority of India Ltd, submit EoIs
  • November 2017: Government amends Insolvency and Bankruptcy Code (IBC), inserts Section 29A which among other clauses debars promoters of defaulting firms classified as NPAs for more than a year from bidding 
  • February 7, 2018: ArcelorMittal transfers 29.05 per cent stake in Uttam Galva Steels, NPA for more than a year, in an inter-se transfer to promoter group at Rs 1 a share
  • February 9, 2018: L N Mittal sells personal shareholding in KSS which has a 100 per cent subsidiary KSS Petron, also classified as NPA for more than a year
  • February 12, 2018: ArcelorMittal, Numetal submit bids for Essar Steel
  • March 20, 2018: Numetal moves NCLT Ahmedabad ahead of CoC meeting to reinforce its eligibility
  • March 21, 2018: ArcelorMittal, Numetal bids found ineligible under Section 29A by the RP; ArcelorMittal on technical grounds and Numetal for its association with Rewant Ruia, son of Ravi Ruia who is a promoter of Essar; second round of bids called
  • April 2, 2018: Second round of bids submitted; NCLT directs RP not to open bids till applications are disposed of
  • April 19, 2018: NCLT remands the first round of bids to RP and CoC for reconsideration, renders the second round invalid
  • April 26, 2018: Numetal moves NCLAT against ArcelorMittal's eligibility
  • May 8, 2018: CoC writes to ArcelorMittal, Numetal to clear dues within seven days
  • May 16, 2018: ArcelorMittal parks Rs 70 billion, makes conditional offer to lenders
  • May 22, 2018: NCLAT asks RP, CoC and adjudicating authority not to pass any order, approving or rejecting plans, including order of liquidation