New Delhi: A day after ArcelorMittal castigated corporate rivals for trying to sabotage its takeover bid of insolvent Essar Steel, the Essar Group, which is now interested in getting back the debt-laden steel company, shot back saying the objective of Insolvency and Bankruptcy Code (IBC) is maximisation of recovery for creditors and that their bid is higher by Rs 12,000 crore.
"The proposal made by Essar Steel shareholders provides for payment of a total of Rs 54,389 crore to various creditors, which exceeds the resolution plan currently approved by the creditors by more than Rs 12,000 crore," the Group led by the Ruias said in a statement.
It said the proposal was submitted under recently introduced Section 12A of the IBC. Under the proposal made by the shareholders of the bankrupt company, all classes of creditors would receive full recovery of their claims, it said.
"The overriding objective of the IBC is maximisation of recovery for creditors and this has been established time and again by courts at all levels. Creditors of Essar Steel, including operational creditors, should not be forced to accept a resolution plan which undervalues the company and its assets," it said.
The Committee of Creditors (CoC) of Essar Steel had in October last year approved the Rs 42,000-crore resolution proposal of ArcelorMittal, which had promised additional Rs 8,000-crore capital expenditure in Essar Steel after acquisition.
Highlighting that a resolution proposal is to be decided between the creditors of Essar Steel and the company, the Essar Group said the creditors have already been provided all relevant information on the proposal and that there was no request for any further information.
As for ArcelorMittal's allegation that the rival applicant provided no details as to the financing of their offer, the Essar Group said that there is no need for them to provide such details to a resolution applicant (ArcelorMittal).
"It is, therefore, surprising to note comments made to the media by a resolution applicant regarding them not having received the details of the proposal," it said.
Following CoC's approval of ArcelorMittal's bid, the promoters of Essar Steel had submitted a higher bid of more than Rs 54,000 crore seeking withdrawal from the insolvency proceedings.
Both ArcelorMittal's approved bid and Essar Group's higher bid are being heard by the Ahmedabad bench of National Company Law Tribunal (NCLT), which on Wednesday has been directed to pass its verdict by January 31, the date of its next hearing.
The two-member bench, headed by Justice S.J. Mukhopadhyay, of National Company Law Appellate Tribunal (NCLAT) also said if the NCLT Ahmedabad bench fails to pass its verdict by January 31, it would call the matter and pass its order in its next hearing.
The appellate tribunal has asked the matter to be listed for next hearing on February 4.