SC Orders Status Quo In Essar Steel Insolvency, Halts Payment By ArcelorMittal

The Supreme Court has ordered status quo in the Essar Steel insolvency case putting a halt on the ArcelorMittal’s payment of ₹42,000 crore. Also the appellate tribunal got orders from top court to speedily decide on the pleas related to the case. 

The bankruptcy court had approved ArcelorMittal’s bid for Essar Steel in a huge relief for the lenders. The case which has dragged on for almost two years saw some closure when the NCLAT finally gave its approval to the ArcelorMittal’s bid of Rs 42,000 crore for the beleaguered steel giant.

The NCLAT had said that it could ask the ArcelorMittal to deposit Rs 42,000 crore in a separate account or with the Ahmedabad branch of the NCLT in the next hearing scheduled for April 23.

The NCLAT had also asked the winning bidder (ArcelorMittal) to file an affidavit laying out the details of resolution plan for the steel giant.

The tribunal also asked the CoC to submit details of the meeting which was held to consider extra allocation to operational creditors. In a meeting of the CoC, the lenders had decided to allocate Rs 1,000 crore for the operational creditors compare to Rs 200 crore earlier. 

The CoC also rejected the suggestion of NCLT to consider higher payment for Standard Chartered which had stated that under the current resolution plan a major chunk of its dues totaling Rs 35 billion rupees would remain unpaid.