The NCLT’s Ahmedabad bench has reserved its verdict on the Essar Steel Asia Holdings maintainability bid to retake the management of the debt-ridden company. The two-judge bench comprised of BP Chaturvedi and Manorama Kumari stated that they will pass an order on the petition by January 31.
The counsel representing ArcelorMittal argued during the proceeding that there is no right to redemption under the bankruptcy laws, which the Essar Steel Asia Holdings is trying to seek. Earlier, in October 2018, ArcelorMittal was chosen as the prefered candidate to take over the bankrupt Essar Steel by the committee of creditors.
ArcelorMittal, who proposed an Rs 42,000-crore offer to acquire debt-ridden Essar Steel, claimed that as per section 12A of the IBC Act only resolution professional has right to file such an application after getting the approval of 90 per cent of the lenders.
Essar Steel Asia Holdings, in response, has proposed to make an upfront payment of Rs 54,389 crores to the lenders led by State Bank of India in order to regain the control over the management, stating that the move will ensure full repayment to all the creditors, including operational creditors. The company also claimed that the proposal is much higher than that of its rival.
ArcelorMittal, which has opposed the proposal, claimed that it was against the Supreme Court order as well as the provisions of the bankruptcy laws.