NCLT approves Vedanta's bid to acquire Electrosteel Steels
18 April 2018
The Kolkata Bench of the National Company Law Tribunal (NCLT) has approved Vedanta’s bid to acquire the bankrupt Electrosteel Steel, making it the first of the 12 large corporate accounts identified by the Reserve Bank of India to pass the bankruptcy resolution process.
The division bench comprising Justice Jinan KR and Justice Madan Balachandra Gosavi, in its order, said the approved resolution plan (RP) “shall come into force with immediate effect’’.
By approving Vedanta’s bid, the bench also dismissed the rival bidder Renaissance Steel India’s allegation that the company was not an “eligible bidder’’ for the insolvent steel maker.
Renaissance filed an application before the Division Bench earlier this month, challenging the decision of the committee of creditors (CoC) that made Vedanta and Tata Steel the only “eligible bidders’’ for Electrosteel Steels.
Vedanta had already (on 31 March 2018) informed the stock exchanges of its emergence as the “successful resolution applicant” under the insolvency process and the receipt of the Letter of Intent (LoI). The company had also accepted the terms of the LoI.
Under the resolution plan, lender banks will, however, stand to lose 55 per cent of the loans outstanding, including interest thereon.
Vedanta Ltd will now have to get the Competition Commission of India’s (CCI) approval, for which they have already applied.