SC gives green signal for ArcelorMittal to take over Essar Steel
The Supreme Court paved the way for ArcelorMittal takeover of debt-ridden Essar Steel for Rs 42,000
Team Udayavani, Nov 15, 2019, 2:18 PM IST
New Delhi: The Supreme Court on Friday paved the way for ArcelorMittal takeover of debt-ridden Essar Steel for Rs 42,000 crore and set aside the July 4 NCLAT order giving equal status to financial creditors and operational creditors.
A bench headed by Justice R F Nariman clarified that financial creditors enjoy primacy over operational creditors and the adjudicating authority cannot interfere with the decision approved by the committee of creditors.
The top court said that the adjudicating authority can send back the resolution plan to the committee of creditors (COC) for implementation in accordance with the guidelines but cannot change the commercial decision taken by the COC.
The bench also relaxed the timeline of 330 days to find a resolution plan as prescribed under the Insolvency and Bankruptcy Code.
The bench said it would be open for the adjudicating authority to maintain the timeline in exceptional cases.
The bench said that the COC resolution plan must balance the interest of all stakeholders.
The apex court had on July 22 ordered status quo in the Essar insolvency case.
The verdict came on a plea of the committee of creditors challenging NCLAT’s order of July 4 in which it had approved steel tycoon Lakshmi Mittal-led ArcelorMittal’s Rs 42,000-crore bid for the acquisition of Essar Steel after it rejected a plea by the lead shareholder of the debt-laden firm challenging the eligibility of the bidder.
The National Company Law Appellate Tribunal (NCLAT) had, however, given operational creditors equal status as lenders in the distribution of the ArcelorMittal’s bid amount among the creditors of Essar Steel.
Essar Steel was auctioned under the new Insolvency and Bankruptcy Code (IBC) to recover Rs 54,547 crore of unpaid dues of financial lenders and operational creditors.
Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.
Top News
Related Articles More
China lifts restrictions, gives all clear nod for Tesla cars as Musk lobbies hard in surprise visit to Beijing
Indian markets rebound sharply on buying in bank stocks, firm global trends
Markets rebound in early trade amid global rally, buying in ICICI Bank and Reliance
Elon Musk in Beijing amid efforts to promote Tesla’s autonomous driving tech
Corporate earnings, US Fed interest rate decision to drive markets in holiday-shortened week: Analysts
MUST WATCH
Latest Additions
ISRO releases ISSAR 2023 report on vulnerability of space assets to collisions
Hunasagi: MLA Bairati Basavaraj’s car overturned
No CM can remain absent for long, it’s against national interest: Delhi HC on Kejriwal
Cricket for the Blind: A Transformative Journey Empowering Visually Impaired Athletes
China lifts restrictions, gives all clear nod for Tesla cars as Musk lobbies hard in surprise visit to Beijing