Kolkata, April 17 (IANS) The National Company Law Tribunal’s (NCLT) Kolkata bench on Monday approved Vedanta Ltd’s resolution plan for the insolvent Electrosteel Steels Ltd, one of the 12 large corporate defaulters identified by the Reserve Bank of India.
During the insolvency proceedings, the debt-laden company’s resolution professional, Dhaivat Anjaria, had submitted Vedanta’s resolution plan before the bench for final disposal after lenders declared it as “successful resolution applicant”.
“The approved (by Committee of Creditors) resolution plan shall come into force with immediate effect,” the order said.
Vedanta informed stock exchanges that it was declared “successful resolution applicant” under the Corporate Insolvency Resolution Process of the Insolvency and Bankruptcy Code, 2016 and had received the Letter of Intent. The company also said it had accepted the terms outlined in it.
The company was referred to the bankruptcy court by the State Bank of India after the Reserve Bank of India had on June 13 asked banks to refer a dozen troubled companies to the NCLT.
The resolution professional had received bids from Vedanta Ltd, Edelweiss Alternative Asset Advisors, Tata Steel and Renaissance Steel in January this year for the insolvent steel maker. Vedanta emerged as the H-1 bidder, followed by Tata Steel. Renaissance Steel was the third highest bidder.
During the insolvency proceedings, Vedanta’s counsel had informed that the Anil Agarwal-promoted company have made an offer of Rs 5,320 crore for the bankrupt steel firm, while the liquidation value stands at Rs 2,899 crore.
According to the order, the total admitted financial debt of the corporate debtor, Electrosteel Steels Ltd, was Rs 13,395 crore.
Abhishek Dalmia-led Renaissance Steel, one of resolution applicant, had alleged that its two rival bidders, Vedanta Ltd and Tata Steel, were not eligible to bid for the insolvent steel maker as per the Section 29A of the Insolvency and Bankruptcy Code (IBC).
The Kolkata bench of the NCLT on March 20, had directed the resolution professional (RP) of the debt-laden company to place all the objections of Renaissance Steel against the eligibility of Vedanta and Tata Steel to bid for the insolvent company before the Committee of Creditors for an “independent consideration” of the committee.
Vedanta’s plan was, however, approved by the Committee of Creditors by 100 per cent voting shares of the committee.
The court, in fact, dismissed the objection raised by the Renaissance Steel.