New Delhi: The National Company Law
Appellate Tribunal (NCLAT) on Friday ruled that Numetal's second bid for
insolvent Essar Steel was eligible, and asked ArcelorMittal to first
clear its dues by September 11 to turn eligible.
The appellate tribunal directed the Committee of Creditors (CoC), lenders of Essar Steel, to expedite its negotiation with eligible bidders to get the best value for the stressed asset.
Apart from Numetal, Vedanta Resources is also an eligible bidder.
The NCLAT's approval of Numetal's second bid has set aside its earlier Ahmedabad Bench order that had ruled that second round of bidding was "prima facie invalid". Numetal had filed its second bid on March 29.
ArcelorMittal has been asked to clear its dues related to Uttam Galva and KSS Petron, of which it was a promoter when these turned non-performing assets (NPA).
The company needs to pay about Rs 7,000 crore in three working days by Tuesday.
Section 29A of the Insolvency and Bankruptcy Code (IBC) disqualifies a promoter of NPA from submitting a resolution plan. The same rule had earlier barred Numetal from being an eligible bidder as it had a stake from a family member of insolvent Essar Steel.
Rewant Ruia, son of Essar Steel promoter Ravi Ruia, had a stake in Numetal at the time of first round of bidding and Numetal was seen as a proxy for Ruias.
However, Rewant has fully divested his stake and JSW Steel is now a part of Numetal consortium.
Though the bids are yet to be opened, officials say Numetal's bid for Essar Steel is about Rs 37,000 crore and that of ArcelorMittal is about Rs 38,500 crore.
The financial creditors claim on bankrupt Essar Steel is to the tune of Rs 49,800 crore.