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NCLT:Arcelor Mittal and Numetal can bid for Essar Steel

Team SoOLEGAL 20 Apr 2018 3:45pm

NCLT:Arcelor Mittal and Numetal can bid for Essar Steel

Ahmedabad: A two judge bench of National Company Law Tribunal (NCLT) Ahmedabad rejected the Resolution professional, Satish Kumar Gupta's decision barring Numetal Mauritius and ArcelorMittal from the first round of bidding for distressed steelmaker Essar Steel. The court declared the bidding held on April 2 as legally invalid and further extended the resolution process of 270 days which is ending on April 29 by a month.

Essar has a total debt of about Rs 52,000 crore and has been undergoing bankruptcy proceedings. Number  of companies have shown interest in buying the company and have participated in IBC process. But there has been huge legal row on the companies which have participated in the bidding process. One of the companies which participated in the bid was Numetal. It was alleged son(Rewant Ruia) of the promoter (Ravi Ruia) was a share holder in this and since IBC rules disallowed defaulting promoters to bid, so on this ground this bid was to be disallowed. Similarly ArcelorMittal Netherlands NV-Nippon Steel and Sumitomo Metal Corp joint venture's bid was rejected as Arcelor Mittal was called as promoter of Uttam Steels whose loans repayment was outstanding which is disallowed under IBC process. Arcelor through their counsel argued that on cutoff date for applying for IBC process, they had sold off their stake in Uttam Steel, so they can't be termed as promoter of Uttam Steel.Infact both Arcelor and Numetal tried to get each other’s bid rejected on the legal ground.

“The CoC and RP have not followed administrative rules as per 29 (A) (c) and 30 (4) of IBC code and the court directs Resolution Professional (RP) and Committee of creditors (CoC) to reconsider their decision for disqualification of the two entities,” Harihar Prakash Chaturvedi, one of the two judges, said in the order.

Tagged: NCLT   Essar Steel   Arcelor   Numetal   Resolution P;rofessional  
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