ArcelorMittal received the go-ahead from the Indian Court of Appeals (NCLAT) on Monday 17 March under the National Companies Act to proceed with its 420 billion rupees (£ 4.62 billion) plan to acquire Essar Steel. Judge J. Muhopadhai confirmed that Essar Steel's creditors' committee could proceed with its implementation.
The court also noted that it will not suspend the decision on the distribution of funds between financial and operational creditors affected by Essar Steel, which leaves in force the "unequal distribution" of funds between them.
Earlier, the ex-directors of Essar Steel questioned the decision of the Ahmedabad Collegium of the National Company Court (NCLT) in favor of ArcelorMittal's application. They said their £ 5.98 billion offer is superior to Lakshmi Mittal's ArcelorMittal offer, as it pays one hundred percent to both financial and operational creditors. Another opponent of the deal, Standard Chartered Bank, also outraged ArcelorMittal's plan, as the lender was given only 1.7 percent of Essar Steel's total debt, while other financial lenders on the creditors' committee (CC) received more than 85 percent of the company's debt.
If ArcelorMittal's plan is implemented, financial lenders will cover £ 4.62 billion out of a £ 5.44 billion total. Operational creditors are scheduled to receive £ 23.54 million versus £ 547.38 million outstanding. And Standard Chartered - 6.60 million pounds against the claims it announced of 350.58 million pounds.
