Numetal moves NCLAT against ArcelorMittal’s eligibility for Essar Steel

Numetal moves NCLAT against ArcelorMittal’s eligibility for Essar Steel

 

New Delhi, Apr 27: Numetal has moved the National Company Law Appellate Tribunal against NCLT which allowed ArcelorMittal from bidding for Essar Steel by paying up dues within 30 days.
The appellate tribunal has issued notices to the resolution professional and the Committee of Creditors. ArcelorMittal had filed a separate appeal against being disqualified for bidding for Essar Steel. Both pleas will be heard on May 17.
The NCLT Bench in the Essar order recently had remanded the first bids — from Numetal and ArcelorMittal — back to the resolution professional (RP) and the CoC with a direction to place all the resolution plans before initiation of fresh bids for consideration of the CoC, in the light of statutory provisions pointing to a 30-day cure period for payment for overdue, in the case of resolution applicants found to be ineligible under Section 29A (c).
The section bars a promoter of a non-performing asset for more than a year from submitting a resolution plan. The NCLT Bench had observed that mere sale of shares and declassification by ArcelorMittal would not absolve them from their responsibility and pointed to the payment of dues for Uttam Galva Steels and KSS Petron, NPAs for more than a year, as a cure. However, it had asked the CoC to take an independent view on the issue of eligibility.
The financial bids in the first round were opened at the marathon CoC meeting held on Tuesday and sources said that ArcelorMittal’s bid was higher than Numetal’s. However, no decision on eligibility or fresh bids was taken. The next meeting was slated for April 27.
The CoC meeting was held on March 21 and both Numetal and ArcelorMittal were found ineligible. It also decided to go for the second round of bids. Bids were invited from the shortlisted expressions of interest due to time constraint, and apart from Numetal who was partnered by JSW Steel and ArcelorMittal, Vedanta, submitted a bid.
However, Numetal moved NCLT subsequently seeking a stay on the opening of the bids and the process remained stalled till the NCLT order, which said that the second round bids might have been prudent but not legally sound.