The National Company Law Tribunal issued a major setback to the Ruia family, as it turned down Essar Steel Asia Holdings Ltd’ (ESAHL) plea to regain control over the debt-ridden Essar Steel. The Ahmedabad bankruptcy court decision clears the way for the Lakshmi Mittal owned ArcelorMittal to inch forward in gaining entire control over the bankrupt Essar Steel.
The Ruias submitted a withdrawal of the petition under section 12A of the insolvency and bankruptcy code (IBC) which states that the insolvency proceedings could be withdrawn if it gathers the approval of more than 90% of the creditors and the National Company Law Tribunal (NCLT).
ESAHL, which is owned by the Ruia family and control 72% stake in Essar Steel, submitted a proposal to the NCLT Ahmedabad regarding the settling the entire debts of the bankrupt company with the sum of Rs. 54,389 crores. The two-judge bench headed by justice Harihar Prakash Chaturvedi and justice Manorama Kumari remarked that the petition filed by ESAHL is non-maintainable.
ArcelorMittal, which proposed a resolution plan with an upfront payment of Rs. 42000 crores, released a media statement stating, “We welcome today’s ruling by the NCLT which protects the integrity of the IBC and ensures its legitimacy as a rules-based law. This is a positive development for both Essar Steel India and the country more broadly. We hope now for a swift resolution to this case.”