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Essar Steel acquistion: NCLT bench turns down Numetal, ArcleorMittal pleas

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The Ahmedabad bench of National Company Law Tribunal (NCLT) on Thursday turned down the pleas of ArcelorMittal and Numetal to reconsider their bids for Essar Steel.

The two companies, both in the race for Essar Steel, had approached the NCLT after their bids were termed ineligible in the first round of bidding, by the resolution professional (RP) overseeing the auction.

Both the companies, along with Vedanta Resources, bid in the second round. But bids couldn't be opened until the NCLT ruled on the pleas.

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On Thursday, the Tribunal asked the resolution professional overseeing the auction to open the bids.

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The Tribunal also extended the deadline for Essar Steel's resolution. The present deadline was April 29.

Eligibility test

The resolution professional had turned down the two bids, terming them ineligible under the Section 29A of the Insolvency and Bankruptcy Code (IBC). The section bars promoters of defaulting companies from bidding for stressed assets. It also prevents "connected persons" from putting in a bid.

While ArcelorMittal's investment in Uttam Galva Steels, a defaulter, was cited; in the case of Numetal, its minority shareholder Rewant Ruia was deemed a connected person as he is the son of Ravi Ruia, one of the founders of the Essar Group.

Sources close to Numetal said that the consortium is likely to appeal to the Appellate court.

Uttam Galva angle

Meanwhile, the Securities Appellate Tribunal will on Monday hear a petition from the minority shareholders of Uttam Galva Steels.

The shareholders had in a letter to SEBI, questioned the declassification of ArcelorMittal as Uttam Galva's promoter. They had also separately mailed to the Uttam Galva's lenders asking if their permission was sought before ArcelorMittal sold back its stake in the company.

According to them, a NDU was signed by ArcelorMittal for Rs 1,400 crore sanctioned by banks to Uttam Galva. The NDU, the shareholders alleged, prevented either of the two shareholders from divesting their stake without prior permission from the lenders.

本文來源:https://www.moneycontrol.com/news/business/essar-steel-acquistion-nclt-bench-turns-down-numetal-arcleormittal-pleas-2552371.html

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