BSE Bankex rose 1.15 per cent as the Supreme Court set aside National Company Law Appellate Tribunal (NCLAT) order that operational creditors should be treated on par with financial creditors in the Essar Steel insolvency case. The verdict paves the way for Arcelor Mittal’s takeover of the bankrupt company. State bank of India (SBI), which has an exposure of more than Rs 13,600 crore to Essar Steel, jumped 5 per cent on BSE in early trade. ICICI Bank, which has an exposure of over Rs 2,500 crore, jumped nearly 2 per cent.
Canara Bank which has an exposure of more than 3,900 crore, went up by 3.5 per cent. Corporation Bank with an exposure of over 1,600 crore, surged 12 per cent on the BSE. Other creditors including Punjab National bank (PNB), IDBI, and Bank of India went up by 3.5 per cent, 5 per cent and 5.5 per cent individually. Nifty Bank was 0.6 per cent up at 30,941.40 points.
The committee of creditors (CoC) had filed petitions against NCLAT’s judgment, challenging that they should recover more than operation creditors in the bankruptcy resolution process.
The SC decision overrules NCLAT’s July 5 judgment that operational creditors should be treated on a par with financial creditors for distribution of funds from ArcelorMittal’s bid in the Essar Steel insolvency case. As of July, total debt in the Essar Steel case had inflated to Rs 69,192 crore following fresh claims by some operational creditors, the court had said.