ArcelorMittal, the world’s largest steelmaker, has reportedly increased its bid for acquiring Essar Steel to Rs 42,000 crores which is significantly higher than the Rs. 37,000 crores offer made by the consortium of Numetal-JSW Steel.
However, the lenders have decided to seek legal opinion in respect of the revised bid by ArcelorMittal. The National Company Law Appellate Tribunal (NCLAT) had earlier asked ArcelorMittal to clear the dues of two companies classified as Non-Performing Assets (NPA) which were either co-promoted or controlled by it. Section 29A(c) of the Insolvency and Bankruptcy Code, 2016 also places a bar on promoters with NPAs from bidding for assets without clearing earlier dues.
ArcelorMittal is said to have moved the Supreme Court seeking a stay of the above NCLAT order. The company had earlier deposited Rs 7000 crores in an overseas current account of the State Bank of India (SBI) with the condition that the same would be payable to the lenders if the company were adjudged the buyer of Essar Steel. However, the NCLAT had refused to accept this payment as discharge of the company’s dues as an offer to repay debt would not fructify till the stipulated conditions were satisfied.
All eyes will be on the Supreme Court to see if the operation of the NCLAT order is stayed and on the company’s steps to discharge the debts of its NPAs.
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