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By PTI
NEW DELHI: In an ultimate effort to maintain control of society, proponents of the Ruia family proposed Thursday to pay lenders Essar Steel a loan of 54,389 crore y included the payment of an amount of 47 507 rupees All contributions and take out the company of the insolvency proceedings.
The offer is better than 42,202 crore Rs offered by the world's largest steel producer, ArcelorMittal, to the resumption of Essar Steel, which lenders are auctioning to recover their unpaid more than 49 000 Rs.
"Essar Steel shareholders submitted a proposal to the Creditors' Committee on Thursday (Thursday) for the full settlement of all receivables from financial creditors, operating creditors, laborers and employees. Essar Steel India Ltd. (ESIL), totaling 54,389 crores of rupees, under Section 12A of the Code of Insolvency and Bankruptcy, "said the company in a statement.
Although the company does not share the place where it raised the money For their part, sources said that the promoters had already planned a cash payment in order to preserve the largest factory sold in the framework of the new insolvency process.
Ruias proposed to pay financial creditors a total amount of 49,395 crores of rupees in order to compensate all their arrears up to date. .
In addition to the operational creditors, Rs. 4,976 crores were offered to employees, while employees had 18 crores to offset all their contributions.
This offer is comparable to that offered by ArcelorMittal to financial creditors, who will have to cut their hair if they wish. Accept this offer.
In addition, he offered a claim of 219 Rupees to the creditors and employees in office.
ArcelorMittal, however, opposed the offer stating that its understanding of Section 12A of the Bankruptcy and Insolvency Code (IBC) did not apply. manufacturing process of Essar Steel.
"Section 12A states clearly that any withdrawal request must be submitted prior to the dispatch of the invitation to
Expressions of Interest for Essar Steel were issued in October 2017", was he added, adding that ArcelorMittal had complied with the order of the Supreme Court and had settled the arrears of the badociated companies Uttam Galva. and KSS Petron.
"We have bank guarantees in place for the payment of Essar Steel.
We expect that the process will continue under the clear terms of the IBC," added ArcelorMittal.
Essar, however, contradicts the statement that Protocol 12A was introduced only in June of this year and that, for cases that go beyond the statement of intent stage. a reasonable opportunity should be offered to businesses to exit the insolvency process.
offers maximum value to all stakeholders and provides 100% repayment to lenders.
"The CoC is empowered to review and approve this Settlement Plan with the required voting right, on the basis of which the resolution process against ESIL could be withdrawn," he added.
Without naming ArcelorMittal, the resolution plan currently under consideration by the CoC "only covers secured creditors (banks)".
On the other hand. , the promoters are "willing to pay the full contributions, which will not only allow the lenders to recover their debts but also to all other categories of creditors, which will take the company out of the resolution process of the l 39; business insolvency under Section 12A of the IBC "
Acceptance of ArcelorMittal's offer would result in a" significant haircut "for lenders.
"In addition, this offer does not provide significant payment to operational creditors and other unsecured creditors," he added. .
The lenders of Essar Steel India Ltd earlier this week are expected to vote on ArcelorMittal's offer of 42,202 crore.
The results of the electronic vote on the offer were expected for Friday.
The steel tycoon Lakshmi Mittal- led ArcelorMittal Prashant Ruia, Director, Essar, said: "Essar Steel has had difficulties due to external factors.
Anyway, the value and quality badets can be determined from the interest shown and the value offered by all major global steel companies.
We have always sought the best resolution for all SED actors. "[19659003] He added that even after the start of the insolvency resolution process, the shareholders of Essar Steel had offered to settle the company's debt, but the lenders had not accepted these offers.
"We estimate that our current proposal will provide 100 recovery for secured creditors and lenders and maximum recovery for unsecured creditors."
This amount far exceeds that proposed in the proposal (ArcelorMittal) and corresponds to the optimization of value, which is the basic premise of the IBC process, "he said.
While the Essar group had reduced its borrowing by more than 80,000 crores in the last year, the developers of ESIL injected an additional corpus of about 8,000 crores beyond the equity brought from 11,000 rupees. Crore.
If CdC accepts its offer, the reduction would reach 125,000 crores of rupees (representing 75% of the Group's debt).
Besides ArcelorMittal, the acquisition of Essar Steel, which can produce about 10 million tons a year, is attracted. Mining Group Mining Group Anil Agarwal & # 39; s Vedanta Ltd and a consortium led by VTB Capital.
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