- India's Supreme Court ruled status quo on the sale of Essar Steel to ArcelorMittal.
- Essar Steel's lenders had appealed against the verdict of National Company Law Appellate Tribunal.
- The NCLAT verdict had put banks at par with other suppliers who were owed money from the bankrupt Essar Steel.
- ArcelorMittal had offered ₹42,000 crore to Essar Steel's lenders and promised to invest another ₹8,000 crore in the company.
The $12 billion Lakshmi Mittal, chairman of ArcelorMittal, has been fighting to take over Essar Steel for over two years now. Finally, in June 2019, it's $6.1 billion bid for the bankrupt steel company, owned by the Ruia family, was approved by a lower court but the Supreme Court of India has put the proposal on hold once again.
A bench headed by Justice Rohinton F. Nariman admitted the appeals by Essar Steel lenders and ArcelorMittal challenging the order of the National Company Law Appellate Tribunal (NCLAT). The share price of ArcelorMittal jumped over 3.7% in trade in Amsterdam.
The court said it will conduct detailed hearing on the contentions made in the appeal and also look into the issues emerging from the verdict after two weeks.
ArcelorMittal had offered ₹42,000 crore to Essar Steel's lenders and promised to invest another ₹8,000 crore in the company. Banks were hoping to get a lion's share of the money for what Essar Steel had owed them but then the NCLAT order had put the banks at par with other suppliers of the company at par with the suppliers with unpaid dues.
Essar Steel is under a debt of ₹30,030 crore to financial creditors and ₹11,969 crore to operational creditors. The tribunal has asked the committee of creditors to engage professional firms to finalise the exact amount to be distributed among each operational creditor.
In the case of Essar Steel, the operational creditors include energy companies Indial Oil, ONGC, NTPC, BPCL, and GAIL. Both the banks and the suppliers would have received 60% of the dues. However, the standoff between the lenders and the vendors has not landed in the Supreme Court putting on hold steel tycoon's bid for the bankrupt Essar Steel once again.
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