India’s natural gas giant, GAIL and Gujarat Energy Transmission Corp (GETCO) in two separate petitions before the National Company Law Tribunal (NCLT) sought to reject ArcelorMittal’s plan to acquire EssarSteel for Rs 420 billion (£4.56bn).
The duo has stated in the petition that the operational creditors of the debt-ridden Essar Steel have been left out in the takeover plan of ArcelorMittal to acquire the steel firm.
In October 2018, a committee of Essar Steel’s creditors approved ArcelorMittal’s Rs 420bn proposal to acquire Essar Steel by paying Rs 419.87bn out of the total dues of Rs 493.95bn of creditors. Under the plan, the operational creditors will receive only Rs 2.14bn against the total amount of Rs 49.76bn.
Both, GAIL and GETCO in their separate interlocutory petitions in the Ahmedabad bench of NCLT said that they have claims of more than Rs 18bn against Essar Steel India, which are yet to be cleared by the concerned.
Last week, in its petition GAIL said it has a claim of Rs 9.07bn towards non-offtake of gas that agreed under a take or pay agreement. Out of this Rs 1.25bn has already been included in the list of creditors of the firm.
"The resolution plan submitted is in contravention of Section 30 (2) of Insolvency and Bankruptcy Code (IBC) 2016. That even otherwise resolution plan is neither legal nor proper in the interest of all creditors," GAIL said calling the resolution plan "arbitrary, irrational, illogical that puts in jeopardy the interest of operational creditors."
GAIL in its petition seeking the rejection of ArcelorMittal proposal said: "completely fails to protect the interest of operational creditors".
GETCO, the power supplier of the company in its petition sought an order to include its complete claim of Rs 8.9652bn and rejection of the ArecelorMittal’s resolution plan if its specified amount is not paid.
"The resolution plan is not in accordance with the provision of the IBC, 2016 and IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 as it does not reflect the crystallised and legally adjudicated debt/liability of the corporate debtor," GETCO stated seeking rejection of the plan.
Earlier, nearly 29 operational creditors of debt-ridden steel company had registered their petitions before NCLT seeking that the debt resolution proposal made by the creditors of the company be considered as it would pay off all debts of financial and operational creditors.
The operational creditors have around Rs 3.81bn in total from Essar Steel. The operational creditors have sought ArcelorMittal to pay their dues in full or consider Rs 543.89bn proposal of the owners of Essar Steel. Earlier, Essar Steel Asia Holding Ltd (ESAHL), the promoter of Essar Steel said it was ready to pay Rs 543.89bn to clear all dues of the financial and operational creditors.
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