The promoters of embattled Essar Steel offered to pay Rs. 54,389 crores on Thursday i.e. 26/10/2018, including an upfront cash payment of Rs. 47,507 crores, in order to clear all dues owed to lenders. The move is said to aim at bringing back the company out of insolvency proceedings.
The proposal was made as the Committee of Essar Steel Creditors voted on a takeover offer made by ArcelorMittal, the largest steelmaker in the world.
The company released a statement, “The shareholders of Essar Steel have today (Thursday) submitted a proposal to the Committee of Creditors (CoC) for full settlement of the entire admitted claims of financial creditors, operational creditors, and workmen and employees of Essar Steel India Ltd (ESIL), aggregating Rs 54,389 crore, under Section 12A of the Insolvency and Bankruptcy Code.”
The plan includes an upfront cash payment of Rs. 47,507 crores to all creditors, including Rs 45,559 crore to secured financial creditors. This would mean that secured financial creditors made a full recovery of their dues.
According to the statement, “The CoC is empowered to consider and approve this settlement plan with the requisite voting share, on the basis of which the corporate insolvency resolution process against ESIL may be withdrawn.”