Essar Steel: NCLT refuses to defer April 2 re-bidding

The NCLT refused to defer the re-bidding date after the committee of creditors (CoC) of Essar Steel, that owes over R 45,000 crore to them, told the tribunal that both ArcelorMittal and Numetal can participate in the second round after taking corrective measures in their ownership structure.

Numetal had moved a petition seeking to defer second round of bidding maintaining there was no need for the exercise if it is held eligible.

Hearing the petition on Tuesday, NCLT adjudicating authority Manorama Kumari said she will hear the petitions moved by Numetal and ArcelorMittal on April 4.

The two companies had moved the NCLT challenging their disqualification by the bankers' committee on March 23. Opposing Numetal's request for defering the second round of bidding, the bankers told the tribunal that both ArcelorMittal and Numetal were given enough time to take corrective measures since their bids were rejected on March 23, and that they can participate in the re-bidding that is closing on April 2 provided they take corrective measures in their ownership structure.

The bankers maintained that the insolvency resolution process has to be completed by April 29 when the 270-days timeline ends, and the disqualified bidders already got 10 days to take corrective measures since they were disqualified on March 23 and bid again for the second round.

The two companies had moved NCLT last week within days of their bids were disqualified by the lenders.

The bankers had met on March 23 in Mumbai and rejected ArcelorMittal's and Numetal's bids - the only two bidders for the crippled 10-million tonne Essar Steel assets at Hazira in Gujarat, citing technical issues.

These two bids were from the beginning questioned by the insolvency resolution professional and others as the promoters of both these firms were defaulters in other firms - the Ruias in Essar Steel and the Mittals in Uttam Galva.