Brings changes in distribution of funds among creditors
The National Company Law Appellate Tribunal has upheld the ₹42,500 crore bid placed by ArcelorMittal for Essar Steel and rejected Ruia’s plea for rebidding.
However, NCLAT has made changes in the way the proceeds from ArcelorMittal will be distributed among the secured and operational creditors.
In a move that would upset banks, NCLAT had directed secured creditors to share more with the operational creditors.
Operational creditors with more than ₹1 crore exposure to the company will get 60 per cent of their dues while employees with less than ₹1 crore dues will get their claim in full.
Essar Steel spokesperson said that the new facts regarding ineligibility under Section 29A, which emerged only after the previous judgement of the Supreme Court and it has not been given due consideration.
“We are awaiting the detailed order and will decide our course of action thereafter,” it said.
The insolvency case against Essel Steel has been going-on since two years. The company had defaulted on its ₹54,000 crore loan and was dragged to insolvency by consortium of banks.
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