India’s top court, supreme court on Thursday (4) has allowed the steel and mining giant ArcelorMittal and Russia’s VTB Capital backed NuMetal to bid for Essar Steel if they clear their Non-Performing Asset (NPA) dues within 14 days.
Supreme court exercised its judicial powers under Article 142 of the Indian Constitution permitting both companies to make a fresh bid for Essar Steel.
A supreme court bench comprising Justice RF Nariman and Justice Indu Malhotra said that both companies were not eligible under amended insolvency and bankruptcy code to bid for Essar but allowed them one more chance after observing the plea of the committee of creditors which objects liquidation of Essar Steel.
The apex court has also asked the committee of creditors to take a decision within two months on rival bids of NuMetal and ArcelorMittal for Essar Steel. The apex court has also ruled that if nothing materialises within 60 days then Essar Steel will go into liquidation.
ArcelorMittal had alleged earlier that NuMetal was ineligible to bid for Essar Steel on various grounds, such as it was a shell company founded by a firm in which Essar Group investor, promoters had a majority of the stake, and if they had to become eligible they would have to clear their earlier debts.
In a judgement earlier, The National Company Law Tribunal (NCLAT) ruled that NuMetal's second bid for Essar Steel was worthy, but ArcelorMittal would be eligible to bid only if it cleared the Rs 70 billion dues of two companies, Uttam Galva and KSS Petron, it was earlier associated with.
While ArcelorMittal had questioned the NCLAT order asking it to pay Rs 70 billion to become eligible for the bidding, NuMetal had also alleged that NCLAT had wrongly used law provisions to enable its rival company to pay the dues of two debt-ridden firms even after it had bid for Essar Steel.
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