The Ruias – owners of Essar Steel – have made a last ditched effort to retain the company by offering to pay 100 percent of the lender payouts. The battle for Essar Steel intensified when the Ruias offered to pay ₹ 54,000 crores with an upfront payment of ₹ 47,507 crores hours after 96 percent of the lenders had approved ArcelorMittal’s bid to take control of Essar Steel.
Ruias’ offer – made under Section 12A of the Insolvency and Bankruptcy Code allows companies to be withdrawn from bankruptcy process if all outstanding dues are cleared. However, the move is going to be opposed heavily by ArcelorMittal as they claim its to late to invoke Section 12A.
Top officials from lending banks have also shown their distaste for the turn of events saying, “This Essar bid is too little, too late. We have already overwhelmingly approved ArcelorMittal’s bid and this Essar intervention now does not mean anything.”
Additionally, Ruias’ attempt also stands to be nipped-in-the-bud as Ruias are the promotors of other Essar group companies that have defaulted. Companies like Essar Projects and Essar Power MP have also been dragged to the bankruptcy court. Also, for a defaulting company to be pulled out of the bankruptcy process, 90 percent of the lenders will have to vote in favour of the withdrawal. However, in the case of Essar Steel, over 92 percent of the lenders have already voted in favour of ArcelorMittal.