INDIA’S top court has allowed steel tycoon Lakshmi Mittal’s business to complete the £4.51 billion acquisition of a bankrupt steel firm.
With the latest Supreme Court ruling on Friday (15), ArcelorMittal can enter one of the largest steel markets in the globe.
After a long legal battle, the latest judgement has permitted the steel giant to make the payment for Essar Steel India Ltd for its purchase.
The court has also set aside a bankruptcy appellate tribunal’s previous order that had given secured and unsecured creditors equal right over the sale proceeds of the bankrupt company.
A three-member judge bench headed by Justice RF Nariman said that the lenders’ panel of a bankrupt company has discretion in the distribution of funds in insolvencies.
The world’s largest steel producer and its partner Nippon Steel Corp had offered to pay $5.8bn in cash to creditors and pump another £866 million in the mill last year.
The offer was approved by a bankruptcy tribunal in March under the insolvency process.
However, the payment was kept on hold by the top court after a dispute arose between lenders on the distribution of funds.
The judgement is expected to set a precedent for other insolvencies that are awaiting resolution over the distribution of funds between the different class of creditors.
The ruling is expected to be the final approval in an over year-long legal war by the Indian business tycoon to acquire Indian steel mill.
Meanwhile, the companies can seek a review of a decision by the same bench of judges on the latest ruling.
