It also said resolution professional, on behalf of the CoC, has issued the Lakshmi Mittal-led company with a Letter of Intent (LOI) stating that it has been identified as the "successful applicant."
"Further to ArcelorMittal being named the H1 (highest) resolution applicant (the preferred bidder) on October 19, 2018, Essar Steel India Ltd's (ESIL) CoC has now approved the Company's resolution plan for ESIL, with the LOI identifying it as the successful resolution plan," it said in a statement.
In response to ArcelorMittal's resolution plan, which includes an upfront payment of Rs 42,000 crore towards bankrupt Essar Steel's resolution debt, with a further Rs 8,000 crore of capital injection into the company to support operational improvement, increase production levels and deliver enhanced levels of profitability, the Ruias-promoted Essar Steel had offered to repay Rs 54,389 crore to all creditors under section 12A of the Insolvency and Bankruptcy Code (IBC).
It also sought withdrawal from corporate insolvency resolution process.
In a bid to take back the control of their asset, the board and shareholders of the Essar Steel had offered an upfront cash payment of Rs 47,507 crore to all creditors, including Rs 45,559 crore to the senior secured financial creditors, i.e. 100 per cent recovery.
Countering this, ArcelorMittalA said, "Our understanding is that the IBC's section 12A does not apply to the resolution process of Essar Steel. Section 12A clearly states that any application to withdraw must be submitted prior to issuance of the invitation for expressions of interest and must be accompanied by a bank guarantee for the specified amounts. The expressions of interest for Essar Steel were issued in October 2017.
"ArcelorMittal has complied with the Supreme Court order, we have settled the overdues of Uttam Galva and KSS Petron and we have the bank guarantees in place for the payment for Essar Steel. We expect the process to continue as per the clear terms of the IBC," the company said.
Again, on Friday, Essar clarified In the current case, the debt laden steel maker was admitted into NCLT on August 2, 2017 and Expression of Interest date was October 20, 2017.
"Section 12A provision did not exist then. In the true spirit of the June 2018 amendment, an opportunity to withdraw from IBC process under Section 12 A should not be denied to ongoing cases where EoI stage was over prior to this amendment," it added.
"Post admission into IBC process also, the shareholders of ESIL, has made offers to CoC in April 2018 and July 2018 offering a comprehensive resolution plan for ESIL. Unfortunately on both the occasions our proposal was declined by CoC. We are now re-approaching CoC under 12A with a very compelling offer that is superior to any other resolution plan that CoC is considering, with full recovery for lenders and giving maximum realization for all other stakeholders (primarily operation creditors)," a spokesperson of Essar said.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
