GAIL throws spanner in Arcelor bid for Essar
GAIL is upset by resolution plan that offers operational creditors only a fraction of what they are owed
- Published 20.11.18, 3:21 AM
- Updated 20.11.18, 12:12 PM
- a min read
State-run gas utility GAIL (India) and Gujarat Energy Transmission Corp (Getco) have moved the National Company Law Tribunal (NCLT), seeking rejection of ArcelorMittal’s Rs 42,000-crore takeover plan for Essar Steel, saying operational creditors have been left out in the proposal.
Last month, a committee of Essar Steel lenders picked ArcelorMittal’s Rs 42,000-crore proposal to take over the debt-laden company by paying Rs 41,987 crore of the total dues of Rs 49,395 crore of financial creditors. Operational creditors, under the plan, are to get just Rs 214 crore against the outstanding of Rs 4,976 crore.
Aggrieved by ArcelorMittal’s resolution plan, GAIL and Getco filed separate interlocutory applications in the Ahmedabad-bench of NCLT, saying they have claims of over Rs 1,800 crore against Essar Steel India, which are not being fully cleared.
GAIL in the November 16 application said it has a claim of Rs 907.20 crore towards non-offtake of gas that it had signed under a take or pay agreement. Of this, about Rs 125 crore has been admitted in the list of creditors of the company.
“The resolution plan is in contravention of Section 30 (2) of Insolvency and Bankruptcy Code (IBC) 2016. That even otherwise resolution plan is neither legal nor proper in the interest of all creditors,” it said, calling the resolution plan “arbitrary, irrational, illogical that puts in jeopardy the interest of operational creditors”.
Stating that the resolution plan “completely fails to protect the interest of operational creditors”, the GAIL petition sought rejection of the ArcelorMittal proposal.
Getco in a separate petition sought a direction to include its entire claim of Rs 896.52 crore and rejection of the resolution plan in case this is not met.
An ArcelorMittal spokes-person said: “We have followed the IBC process since first submitting our EOI in 2017. The committee of creditors has decided ArcelorMittal’s plan is in the best interests of Essar Steel and we are confident that the process will be implemented correctly and according to the law.”