Corporate

Yet another spanner in ArcelorMittal’s Essar Steel works

There is yet another spanner in the works for the Essar Steel Ltd insolvency resolution, with a Gujarat state utility challenging ArcelorMittal Netherlands BV’s rescue plan before the bankruptcy tribunal. Dakshin Gujarat Vij Co. Ltd (DGVCL) on Monday approached the dedicated bankruptcy court in Ahmedabad, opposing the resolution plan submitted by the resolution professional (RP). In its plea, DGVCL said its claim of ₹5,882 crore will stand extinguished if the tribunal approves the plan. It said the ArcelorMittal’s Essar Steel bid does not take into account contingent liabilities to debtors. The move follows unsecured creditors like Standard Chartered Bank, Gujarat Energy Transmission Corp., GAIL (India) Ltd, and 30-odd operational creditors approaching the bankruptcy court to settle their dues. It is further learnt that all contingent liabilities of the corporate debtor up to the plan approved date arising out of any proceedings in which the corporate debtor is a party shall, unless otherwise stated in the resolution plan and irrespective of the final outcome of such proceedings, stand irrevocably and unconditionally reduced to and at the amounts that would be realizable if the contingent liability had fructified at any time prior to the plan approval date, according to DGVCL’s petition filed before the Ahmedabad bench of NCLT on Monday.DGVCL had approached NCLT Ahmedabad by filing an interlocutory application earlier this year, challenging the claim amount. The petition is still pending.

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