Global steel major ArcelorMittal Monday told the National Company Law Appellate Tribunal (NCLAT) that it would pay Rs 42,000 crore, including a minimum of guarantee of Rs 2,500 crore as working capital, for acquiring debt-laden Essar Steel under the insolvency process.
Senior advocate Harish Salve appearing for ArcelorMittal also accused Ruias, former Essar Steel promoters, of creating hurdles in the resolution process of the bankrupt steelmaker.
According to him, there have been eight attempts by Ruias to create hurdles in the insolvency resolution process of Essar Steel.
The NCLAT is hearing a batch of appeals filed by several stakeholders challenging NCLT's approval to ArcelorMittal's resolution plan for Essar Steel.
Countering the allegation of Standard Chartered bank over valuation of Essar Steel, Salve submitted that the liquidation value of Essar Steel was Rs 15,800 crore and ArcelorMittal India is paying almost three times, which is "fair", "reasonable" and "adequate" to meet the interest of the stakeholders.
Salve contended that during the resolution period, Essar Steel had a profit of Rs 3,500 crore and the company is already providing Rs 2,500 crore as working capital.
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"As ArcelorMittal has assured a working capital of Rs 2,500 crore, a profit of Rs 3,500 crore means that ArcelorMittal will make available a sum of Rs 43,000 crore to the creditors of the company," Salve said adding that "Rs 42,000 crore is the frozen figure".
He further said that ArcelorMittal would also infuse Rs 8,000 crore additionally in the company after the takeover.
Over distribution of Rs 42,000 crore between financial and operational creditors of Essar Steel, Salve suggested there should be equitable distribution" of the money coming from ArcelorMittal.
However, he also said that it was not on ArcelorMittal to decide over the distribution of the fund.
On being asked from the NCLAT bench over it, Salve said, "It should be finally decided by NCLT and you (NCLAT)."
"Some people are manufacturing hurdles," Salve said, adding "Their conduct is under contempt ... they come and raise the issues again."
"In our estimate, the value of the asset is USD 25-30 million. Their estimate is USD 640-45 million. I am saying them to give us USD 600 million for the asset," he said, adding that it should be left for the conjecture, where the erstwhile promoters "use the money for buying yachts or planes."