A day after the Rs 54,000-crore offer, made by the Essar Steel’s board and shareholders to repay the entire debt of the company, ArcelorMittal on Friday said the Committee of Creditors (CoC) has voted to approve its acquisition plan for the debt-laden steel company.
It also said resolution professional, on behalf of the CoC, has issued the Lakshmi Mittal-led company with a Letter of Intent (LOI) stating that it has been identified as the “successful applicant.”
“Further to ArcelorMittal being named the H1 (highest) resolution applicant (the preferred bidder) on October 19, 2018, Essar Steel India Ltd’s (ESIL) CoC has now approved the Company’s resolution plan for ESIL, with the LOI identifying it as the successful resolution plan,” it said in a statement.
In response to ArcelorMittal’s resolution plan, which includes an upfront payment of Rs 42,000 crore towards bankrupt Essar Steel’s resolution debt, with a further Rs 8,000 crore of capital injection into the company to support operational improvement, increase production levels and deliver enhanced levels of profitability, the Ruias-promoted Essar Steel had offered to repay Rs 54,389 crore to all creditors under section 12A of the Insolvency and Bankruptcy Code (IBC).
It also sought withdrawal from corporate insolvency resolution process.
In a bid to take back the control of their asset, the board and shareholders of the Essar Steel had offered an upfront cash payment of Rs 47,507 crore to all creditors, including Rs 45,559 crore to the senior secured financial creditors, i.e. 100 per cent recovery.