The National Company Law Appellate Tribunal (NCLAT) today pronounced its judgement on the appeals of Numetal and ArcelorMittal in the Essar Steel take over issue. The two companies had appealed against the disqualification of their bids for taking over Essar Steel as part of the bankruptcy process.
ArcelorMittal had said that the company had exited Uttam Galva before it had submitted bids for Essar Steel in February this year. Section 29A of the Insolvency and Bankruptcy Code (IBC) prohibits related parties of defaulting firms from participating in the resolution process.
In the case of NuMetal resolution professionals held that Rewant Ruia, Essar Steel promoter Ravi Ruia's son, had been a beneficiary of a trust that had had links to Numetal. Russia's VTB Capital owns 40% of Numetal.
According to today’s judgement pronounced by a two judge bench both the companies retain the chance to bid for Essar Steel. ArcelorMittal has been asked by the courts to clear dues amounting to Rs 7,000 crores within three days if it wants to remain eligible to bid for Essar Steel.
A third bidder in the form of Vedanta Resources is also in the race. According to Mint creditors may look at all the three bids before deciding the winner. Essar Steel owes Rs 49,000 crores to creditors and is one of India's landmark non-performing asset (NPA) cases.
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