The National Company Law Appellate Tribunal (NCLAT) has put the resolution process of Essar Steel on hold. NCLAT will now hear ArcelorMittal and Numetal, the two contenders in the first round of bidding, on July 23.
Numetal, incorporated in October last year to bid for Essar Steel that was undergoing insolvency, has metamorphosed way to fast in the last six months to suit the bidding eligibility criteria. At the time of incorporation, Rewant Ruia, son of Essar Steel promoter Ravi Ruia, held 100 per cent of Numetal. He divested five times in a span of six months. However, as of today, Rewant owns no stake in the bidding company.
On October 13, 2017
Numetal, Aurora Enterprises Limited (AEL) and Aurora Holdings Limited(AHL) all three entities were incorporated
AEL held 100% shareholding of Numetal
AHL held 100% shareholding of AEL
Rewant Ruia held 100% shareholding of AHL
Inference: Rewant Ruia held entire 100% of Numetal at the time of incorporation
On October 18, 2017
AEL transferred 26.1% equity to Essar Communications Limited (ECL)
On October 20, 2017 (Numetal submitted Expression of Interest (EOI))
AEL held 73.9% shareholding of Numetal
ECL held 26.1% shareholding of Numetal
On November 22, 2017
ECL transferred 26.1% equity to Crinium
AEL transferred 25.1% equity to Indo International
AEL transferred 9.9% equity to TPE
AEL transferred 13.9% equity to Crinium
Thus, Crinium Bay held 40% (26.1% from ECL + 13.9% from AEL) shareholding of Numetal
Inference: AEL held 25% shareholding of Numetal on 22 November 2017
On February 12, 2018
Numetal submitted the resolution plan
On/before March 29, 2018
AEL divested remaining 25% shareholding of Numetal
Crinium held 49% shareholding of Numetal
Exact shareholding of Indo International, JSW Steel, Technopromexport (TPE) not known
April 2, 2018 (deadline for second bidding round)
AEL divested entire 100% shareholding. Rewant Ruia not part of Numetal consortium
Inference: Numetal completely new entity from the time of incorporation
Why Did Rewant Exit?
Numetal was rejected in the first-round bidding as it was not compliant with section 29A of the Insolvency and Bankruptcy Code. The provision does not allow promoters of defaulting companies as well as related parties and connected persons from bidding for stressed assets unless they clear their dues. Numetal was asked to clear the dues of Essar Steel. For Numetal, Rewant’s participation also gave rise to the impression that the consortium was a proxy for Ruias, promoters of Essar Steel.
Current shareholders of Numetal:
**Crinium Bay, an arm of Russia-based VTB Bank
**Technopromexport (TPE) which is a Russian engineering company
**Sajjan Jindal-led JSW Steel is a primary steel producer in the domestic market
**UAE-based Indo International Trading FZCO trades in construction, steel and related materials.
“We have boarded Numetal as an investor and participated in the second bidding round. We have never specified any percentage of shareholding in the company,” said a JSW Steel source close to the development.
Compiled by Aditi Divekar