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Thriveni Earthmovers Challenges ArcelorMittal Resolution Plan for Odisha Slurry Pipeline

Steel News - Published on Thu, 16 Jan 2020

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Business Standard reported that ArcelorMittal’s resolution plan for Odisha Slurry Pipeline Infrastructure, approved by the committee of creditors, has been challenged by the unsuccessful resolution applicant, Thriveni Earthmovers as well as Srei Infrastructure Finance, a lender. Thriveni has moved an application in the National Company Law Tribunal so that the CoC reconsiders its resolution plan and evaluates it on merit of maximisation of value. In its application filed with the NCLT, Thriveni has alleged that the financial interest of the CoC lies in maximising the value of Essar Steel India, a captive consumer of the slurry pipeline, and not OSPIL. The matter will be taken up by the Cuttack Bench of the NCLT early February.

A spokesperson for ArcelorMittal, said, “We cannot comment on details of an ongoing legal matter. We can confirm that the lenders of OSPIL approved ArcelorMittal’s resolution plan for the slurry pipeline unanimously, with a 100 per cent vote in favour of the plan. The plan provides upfront payment with full recovery of the principal amount to all the financial lenders.”

Early December, OSPIL’s CoC selected ArcelorMittal’s INR 2,200 crore upfront payment offer. In the running was Thriveni, which had submitted a INR 3,300 crore bid with an upfront payment of INR 8 crore. The total admitted claims of OSIPL is to the tune of INR 2,660 crore. Lenders decided in favour of ArcelorMittal, primarily due to the difference in upfront payment. The fact that Thriveni’s repayment stretched over a period of time, was also an issue.

The 253-km slurry pipeline, on the other hand, is a critical ancillary unit of Essar Steel. The pipeline connects the iron ore beneficiation plant in Dabuna with the 12-million-tonne pellet plant in Paradip, Odisha. The pellets, a raw material feed for the steel plant, are shipped to Hazira in Gujarat.

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Posted By : Rabi Wangkhem on Thu, 16 Jan 2020
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