Out of all the options, Creditors to Essar steel are weighing three options, one of which has to be reported before an appellate bankruptcy court on Monday. The insolvency proceedings have dragged on for long two years and now the company seeks to draw to a case closed.
One of the options includes asking ArcelorMittal to pay up the whole amount and keep the contentious payments to operational creditors in an escrow account or just comply with the suggestions made by National Company Law Appellate Tribunal (NCLAT)in the last hearing on Friday.
The two-judge bench had on Friday asked creditors to consider giving operational creditors 10% of the total proceeds, up from 5% considered in the agreed plan. The bench also asked lenders to consider giving Standard Chartered more of the dues than what is proposed now, suggesting a pro rata formula be applied for all financial creditors.
Four creditors with the largest exposures, namely Edelweiss ARC, State Bank of India, IDBI Bank and ICICI Bank, have formed a core committee to take the decision on behalf of lenders as the committee of creditors (CoC) has been technically dissolved after a decision to award the bid to ArcelorMittal was taken.