Battle for Essar Steel: JSW plans to go solo if fresh bids are allowed

Battle for Essar Steel: JSW plans to go solo if fresh bids are allowed

New Delhi, Apr 23: JSW Steel may go it alone as the committee of creditors (CoC) for Essar Steel decides to consider a fresh round of bids altogether.
JSW Steel is pointing towards a part of the NCLT order, which was uploaded on Saturday, which says “in the option no. 1, it has been suggested to initiate a new process for inviting bids from all interested parties (starting with initiation of new expression of interest) and follow the entire process as per new request for proposal as approved by the CoC, which were not considered as viable and appropriate by the CoC keeping in view of the time constraint, while in our humble view to be more sound reasonable and legally transparent… therefore, we feel while remanding back the matter to the CoC for reconsideration of the resolution plan and resolution applicant, to look at option 1 as per the deliberation made in the CoC meeting dated March 21, 2018…”. Seshagiri Rao, joint managing director and chief financial officer, JSW Steel, said, JSW Steel had evinced interest earlier to bid for Essar. But the CoC decided to invite bids from only shortlisted expression of interest (EoI) which ruled it out citing time constraint.
Subsequently, JSW partnered NuMetal in a step-down subsidiary, Nu Metal & Steel. Asked if JSW would bid alone if the CoC did decide to invite a fresh round of bids and not restrict to the shortlisted EoIs, Rao replied in the affirmative and said that is what we wanted. “We would be able to submit the bids on time,” he added.
The committee of creditors is expected to meet shortly to take a call on the bids after Thursday’s order by the Ahmedabad Bench of the National Company Law Tribunal (NCLT). Some suggested the meeting could even take place on Monday.
The CoC has a host of issues to consider.
The NCLT Bench has directed the resolution professional to place before the CoC the first round of bids from NuMetal and ArcelorMittal.However, whether the CoC will give Numetal and ArcelorMittal 30 days to cure their bids or invite a fresh round of bids during the time has been left to the CoC.
The 270-day stipulated date for Essar was April 29, but the NCLT Bench has excluded the period from March 20 to April 19, the day of the order, from the mandatory 270-day window of the insolvency process, as laid out by the IBC (Insolvency and Bankruptcy Code). With this, the deadline now stands extended by a month.
The order said the CoC did not follow the prescribed procedure to afford reasonable opportunity to the resolution applicants to make overdue payment to remove disability of the resolution applicants or to make good of the disability.
Section 29A (c) refers to a provision that disallows a person from submitting a resolution plan if he has an account that has turned a non-performing asset (NPA) for more than a year unless he makes payment of all overdue amounts with interest thereon before submission of a resolution plan.