Rs 2,500 cr in ArcelorMittal bid for Essar Steel is for working capital: CoC to NCLAT


Rs 2,500 cr in ArcelorMittal bid for Essar Steel is for working capital: CoC to NCLAT

The lenders of Essar Steel Thursday informed the NCLAT that out of Rs 42,000 crore coming from the resolution plan of ArcelorMittal, Rs 2,500 crore has been marked as the working capital of the debt-laden firm. The Committee of Creditors (CoC) submission before a National Company Law Appellatre Tribunal (NCLAT) implied that only Rs 39,500 crore would be available for distribution among the financial creditors and operational creditors.

Senior advocate Gopal Subramanium representing the CoC informed the appellate tribunal that the actual upfront amount is Rs 39,500 crore and the rest Rs 2,500 crore has been committed as working capital for Essar Steel. In Monday’s hearing, Standard Chartered, one of the secured financial creditors, claimed that bankers have clubbed Orissa Slurry Pipeline Ltd (OSPL) with Essar Steel in the auction to recover unpaid loans.

It alleged that Rs 2,500 crore, which should have been paid to Standard Chartered, has been diverted to lenders of OSPL. On this, the COC clarified that the current resolution plan is only for Essar Steel Ltd and OSPIL Ltd is not part of it. “ Read more

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