Finance

ArcelorMittal Triggers Rs 42,000 cr Payment for Acquisition of Essar Steel

ArcelorMittal, the world-renowned steel giant, has started payment disbursement for the strategic acquisition of Essar Steel for a total amount of Rs. 42,000 crores, revealed the sources on December 13, 2019.

Earlier in November this year, the Supreme Court of India gave its nod to the LN Mittal-spearheaded global firm to take control of the debt-ridden Essar Steel. The banking sources revealed that “Payment from ArcelorMittal has started flowing and entire payment is expected to be cleared in a day or two.”

A prominent source close to the firm stated that ArcelorMittal has collected the entire amount involved in the process and is adamant about clearing the payment by Monday.

“ArcelorMittal has arranged the entire amount of Rs 42,000 crore which is likely to be transferred to State Bank of India, the lead banker to take control of Essar Steel under the Insolvency and Bankruptcy Code,” stated one of the sources.

As per the sources, post the payment to the lenders, the project will be the single-biggest recovery under the IBC. However, when asked for a comment, ArcelorMittal restrained itself from making a comment on the deal.

The sources revealed that the reputed firm had collected the entire amount of Rs. 42,000 crores to be distributed in an escrow account, it restrained itself from disbursing the sum to the lenders after the Supreme Court order.

The sources stated that SBI would get the biggest share of Rs. 12,161 crores in the deal, as prescribed by the committee of creditors. Canara Bank will get Rs. 3,493 crores while ICICI Bank will get Rs. 2,110 crores as part of the deal.

“Completion of the transaction is now expected before the end of the year. After completion, ArcelorMittal will jointly own and operate ESIL in partnership with Nippon Steel Corporation, Japan’s largest steel producer and the third-largest steel producer in the world, in line with the joint venture formation agreement signed by the two companies,” stated the company in a statement.

The Supreme Court ruled out the National Company Law Appellate Tribunal order given on July 4, restoring equal status to financial creditors and operational creditors. The bench affirmed that the financial creditors would enjoy priority status over operational creditors. The decision taken by the committee of creditors shall not be objected by the adjudicating authority. The bench stated that the CoC resolution plan should focus on keeping the interests of all the creditors.

Jodie Miller

Jodie Miller is experienced journalist. She holds double degree in journalism and communication. She joined our team as a content curator. She enjoys writing and curating contents related to finance and forex world.
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