NCLT granted 1-week extension to consider Arcelor's plan for Essar Steel

The National Company Law Appellate Tribunal (NCLAT) Tuesday granted one week time to NCLT Ahmedabad to decide over the Rs 42,000-crore resolution plan submitted by ArcelorMittal for the debt-ridden Essar Steel. A two-member bench headed by Justice S J Mukhopadhaya has directed the Ahmedabad bench of the National Company Law Tribunal (NCLT) to decide over the matter by February 19.

During the hearing, the NCLAT was informed that Ahmedabad bench has completed hearing on operational creditors plea and is scheduled to hear suspended Essar directors later in the day Tuesday. "It appears that pursuant to the earlier order by this Appellate Tribunal, the Adjudicating Authority has proceeded with the matter. It is informed that the 'Operational Creditors' have been heard and the dissenting 'Financial Creditor' has also been heard," said NCLAT.

It further observed that hearing of the "(suspended) 'Board of Directors (Promotors)' is continuing" and one or other applications may be pending for consideration." "In the circumstances, we hope and trust the hearing will be taken up on a day-to-day basis and be concluded by 19th February 2019. Thereafter appropriate order is passed immediately thereon," the appellate tribunal said.

It was directed to post the matter on February 28 'for orders'. The NCLAT direction came while hearing an application filed by ArcelorMittal, whose Rs 42,000 crore takeover proposal of the indebted steel-maker has been approved by the committee of creditors (CoC) and is pending before the NCLT for approval.

The NCLT Ahmedabad on January 29 rejected the debt settlement proposal put forth by shareholders of Essar Steel saying the offer violates Section 12A of the Insolvency and Bankruptcy Code. The NCLT said that Rs 54,389-crore offer by Essar Steel Asia Holding, which is much higher than the ArcelorMittal's Rs 42,000 crore bid, is not maintainable as the only way to make a proposal is through Section 12A. Essar Steel owns a 10-million-tonne steel mill in Gujarat.