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ArcelorMittal bid for Essar Steel includes INR 2500 crore working capital - CoC to NCLAT

Steel News - Published on Fri, 17 May 2019

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Business Today reported that Senior advocate Gopal Subramanium representing the Committee of Creditors of Essar Steel informed National Company Law Appellatre Tribunal that out of INR 42,000 crore coming from the resolution plan of ArcelorMittal, INR 2,500 crore has been marked as the working capital of the debt-laden firm, implyingthat only INR 39,500 crore would be available for distribution among the financial creditors and operational creditors.

COC clarified that the current resolution plan is only for Essar Steel Ltd and OSPIL Ltd is not part of it. Mr Subramanium submitted "It is a fact that in the Supreme Court offer was made for INR 42,000 crores. But in the final judgment, the Supreme Court only referred to the previous offer of INR 35,000 crore. Ultimately, after a lot of discussion it was raised to INR 39,500 crore. Then there was a discussion on working capital. We said please guarantee INR 2,500 crore, so total upfront payment is INR 42,000 crore."

According to him, this Rs 2,500 crore is the minimum guarantee to the creditors of Essar Steel irrespective of whether the company is in profit or loss during the pendency of the insolvency resolution process. He said "We wanted a guarantee that if it was a minus, at least INR 2,500 crore you must commit. If, however, there is actually profit, whatever is actually profit, will be given to lenders. We said alright. If it is negative, there is INR 2,500 crore and whatever excess of INR 2,500 crore is there, it would be given back to the creditors.”

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Posted By : Sanju Moirangthem on Fri, 17 May 2019
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