There is no resolution yet to the Essar Steel takeover of ArcelorMittal as the National Company Law Appellate Tribunal on Tuesday observed that there can be no discrimination of the operational creditors on the basis of their dues. The Committee of Creditors passed a resolution which guarantees full payment to operational creditors with dues of less than one crore, whereas the operational creditors with higher dues get almost zero returns.
A two-member bench headed by Justice SJ Mukhopadhaya ruled that the CoC cannot treat the operational creditors differentially. “You cannot discriminate among the same set of creditors. There cannot be discrimination among operational creditors on the basis of their dues,” the bench said.
According to resolution proposal approved by CoC, the operational creditors will only get Rs 214 crore against their overall claims of Rs 4976 crore. The plan proposes a payment of Rs 41,987 crore to financial creditors against their claims of Rs 49,395 crore. The total dues of operational creditors, which the CoC has agreed to settle fully, is close to Rs 200 crore, whereas the dues of operational creditors with claims higher than Rs 1 crore is Rs 4900 crore, and there is no provision made for settlement of these creditors in the ArcelorMittal resolution passed by CoC in October. The next hearing is on May 2.
Source- Ahmedabad Mirror.