Over 92 percent of Essar Steel’s committee of creditors (CoC) voted in favour of ArcelorMittal-Nippon Steel’s resolution plan, said people familiar with the matter. Under the Insolvency and Bankruptcy Code (IBC), a resolution plan needs at least 66 percent votes from the CoC to be cleared.
ArcelorMittal-Nippon Steel’s offer amounts to over 85 percent recovery for lenders, heads of two large banks told CNBC-TV18 on the condition of anonymity. ArcelorMittal-Nippon Steel joint venture has offered to pay lenders Rs 39,500 crores upfront, and another Rs 2,500 crores approximately which is retained cash on Essar Steel’s books, taking the total repayment to lenders to Rs 42,000 crores. In addition, ArcelorMittal has also offered to infuse close to Rs 8,000 crores into Essar Steel post-acquisition.
On October 20, CNBC-TV18 had reported that the CoC has declared ArcelorMittal- Nippon Steel as H1 or highest bidder, ahead of Vedanta Group, that had made a very similar offer of repayment to lenders. With the lenders nod in place, the resolution plan will now be placed before the National Company Law Tribunal (NCLT) for the final stamp of approval. Read More
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