Essar Steel auction: After ArcelorMittal, Numetal moves Supreme Court against NCLAT order

Russia's VTB Group-backed Numetal on September 12 moved the Supreme Court against the National Company Law Appellate Tribunal's (NCLAT) decision to give ArcelorMittal three days to clear its dues.

The new turn in the Essar Steel auction saga happened even as the apex court took up ArcelorMittal's application against NCLAT's order asking it to clear dues to become an eligible bidder.

The dues pertain to Uttam Galva Steels and KSS Petron, both defaulters, in which ArcelorMittal had significant stakes. Clause 29A of the Insolvency & Bankruptcy Code prevents promoters of defaulting companies from bidding for stressed assets.

The dues amount to Rs 7,000 crore.

In its order last week, NCLAT cleared Numetal's second round bid and asked ArcelorMittal to pay the dues by September 11 for its offer to be eligible.

"ArcelorMittal getting three days to pay the dues of Uttam Galva and KSS Petron comes as a surprise, since the IBC law does not provide for such an extended window to pay and become eligible," said an executive explaining Numetal's move.

"Despite being granted an extended window, ArcelorMittal has yet to make the overdue payment and is instead issuing media statements merely stating its willingness to pay," added the executive.

Sources added that Numetal's petition will be taken up early next week.

ArcelorMittals' contentionThe Supreme Court on September 12 heard ArcelorMittal's application against the NCLAT order asking it to pay the dues, even as it cleared Numetal's bid.

ArcelorMittal moved the court after offering a revised bid of Rs 42,000 crore for Essar Steel, topping Numetal's bid of Rs 37,000 crore.

Essar Steel has debts of Rs 49,000 crore.