Infrastructure

ArcelorMittal clears dues to remain an eligible bidder for Essar Steel

Updated : May 16, 2018 09:10 AM IST

ArcelorMittal deposited close to Rs 7000 crore in an escrow account at the State Bank of India to clear the outstanding dues of Uttam Galva Steels and KSS Petron.

Both Numetal and ArcelorMittal’s pleas regarding their disqualification will be heard by the National Company Law Appellate Tribunal on May 17.

ArcelorMittal clears dues to remain an eligible bidder for Essar Steel

With the seven day deadline for the NuMetal consortium and ArcelorMittal to clear outstanding dues to remain eligible for Essar Steel ending on May 15, sources tell CNBC-TV18 that only one of the bidders has deposited money with the banks.

Banking sources have indicated that ArcelorMittal deposited close to Rs 7000 crore in an escrow account at the State Bank of India to clear the outstanding dues of Uttam Galva Steels and KSS Petron.

On May 9, the Committee of Creditors had passed a resolution to allow bids from both NuMetal and ArcelorMittal on the condition that they repaid all outstanding dues within seven days.

The NuMetal consortium, however, has not offered any repayment to lenders as yet, according to sources.

In an earlier statement to CNBC-TV18 on May 9, a NuMetal spokesperson said, “NuMetal presented before the Committee of Creditors (CoC) that it is a fully eligible resolution applicant as per the IBC.

Neither NuMetal nor its shareholders have any loans overdue with any creditors in India. Aurora, which had minority shareholder interest with 25% equity in NuMetal, neither had management role nor any right to directorship in the company.

Neither Aurora nor its beneficiary has any loan irregularities with Indian lenders and banks. In any event, NuMetal's other shareholders have already bought out Aurora’s shareholding in the company”.

It is likely that NuMetal will challenge the Committee of Creditors decision to ask it to repay dues of Essar group companies to remain eligible.

Both NuMetal and ArcelorMittal’s pleas regarding their disqualification will be heard by the National Company Law Appellate Tribunal on May 17.

An ArcelorMittal spokesperson confirmed the development to CNBC-TV18 without commenting on the amount that has been repaid, saying, “ArcelorMittal can confirm it has written to the Committee of Creditors (CoC) for Essar Steel India Limited (ESIL) in response to the letter received on May 8, 2018."

The details of this letter are confidential. However ArcelorMittal maintains that its offer for Essar Steel, submitted on 12th February, is and always has been eligible.

"Any offer to pay any outstanding loans of companies where we only had a passive stake with no management or governance role, would be made without prejudice to demonstrate the seriousness of our commitment to India and ESIL. We continue to believe that a swift resolution is in the best interests of ESIL and its stakeholders, including its employees who deserve a strong and certain future,“ ArcelorMittal said.

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