ArcelorMittal inches closer to acquiring Essar Steel

NCLAT on Thursday approved ArcelorMittal’s bid of Rs. 42,000 crore for Essar Steel India and also ruled that the resolution professional (RP) and not the CoC has a no role in distribution of amount between financial creditors and operational creditors.

The National Company Law Appellate Tribunal (NCLAT) modified the distribution of Rs. 42,000 crore among Essar Steel's creditors. The tribunal ruled that there could be no classification on the basis of financial creditors being secured and unsecured and directed that all financial creditors having a claim amount of more than Rs. 1 crore would be eligible to 60.7 per cent of their admitted claim. It also granted around 60 per cent of the admitted claim to certain operational creditors with claims of over Rs. 1 crore. The total claim amount is currently at more than Rs. 69,000 crore (financial and operational creditors).

Earlier, Essar Steel received an order to supply 1 million tonnes of steel to Posco Steel India for Rs. 5,000 crore. The shipment of the order is to be made to Posco Maharashtra which manufactures value-added steel products. Essar Steel's Hazira plant will process the order.

Meanwhile, the major banks that have exposure to Essar Steel are State Bank of India, Canara Bank, Bank of Baroda, IDBI, Union Bank and Punjab National Bank.