Essar Steel creditors' panel meeting with IRP deferred again

A decision on the eligibility of ArcelorMittal and Numetal who bid for debt-laden Essar Steel could not taken even today as the meeting of resolution professional and committee of creditors was deferred for the third-straight time, sources said.

The meeting is now expected sometime early next week, a source said.

"Coming Monday and it will be one month (since bids were submitted). No decision on eligibility of the bidders have been taken," another source said.

Bids for Essar Steel were submitted on February 12.

While Luxembourg-based ArcelorMittal's partner is Nippon Steel & Sumitomo Metal Corp for the takeover, Russia's VTB Group used a Mauritius-based investment vehicle Numetal, where Rewant Ruia - Essar Group promoter Ravi Ruia's son - held 25 per cent stake.
 

This was the third-straight time that a decision could not be taken on the eligibility of the bidders as RP-CoC meeting could not take place.

Earlier, the March 5th meeting of Essar Steel's committee of creditors (CoC) and the Insolvency Resolution Professional (IRP) was deferred to March 7 as the IRP and the CoC could not decide on the eligibility of the bidders who have submitted resolution plans for Essar Steel.

The meeting was again deferred for March 8 (today).

When asked for the reason for the deferment of today's meeting, the source requesting anonymity said, "They are still figuring out that who are eligible, not eligible. The legal advisors to the RP...are yet to submit the report to the RP; then RP will take it to CoC."

Essar Steel was among the initial 12 companies identified by the Reserve Bank of India (RBI) for insolvency proceedings. It has a loan exposure of Rs 37,284 crore.

With an aim to debar promoters of defaulting firms, the government last year amended the Insolvency Bankruptcy Code including Section 29 A which prohibits promoters or sister concerns of companies with NPAs from participating in auctions.

While ArcelorMittal was a promoter of a bankrupt firm Uttam Galva, Essar Group promoter Ravi Ruia's son Rewant Ruia holds 25 per cent stake in Numetal which has bid for Essar Steel.