The dedicated bankruptcy court has rejected Arcelor-Mittal India’s plea to set aside the resolution plan submitted by Royale Partners Investment Fund (RPIF) for EPC Construction India (EPIL), formerly Essar Projects India.
The lenders of EPC Construction India have approved RPIF’s revival plans with 73% voting.
The local subsidiary of Luxembourg-based ArcelorMittal Group sought the National Company Law Tribunal’s (NCLT) intervention to direct EPIL’s lenders to re-vote on its plan and restrain the resolution professional (RP) and lenders from proceeding with implementation of RPIF’s resolution. ArcelorMittal is also vying for Essar Steel.
“I am not inclined to interfere with the decision of the committee of creditors (CoC) in approving RPIF’s resolution plan,” said MK Shrawat, presiding officer of the Mumbai-bench of NCLT. “As far as legal and procedural requirements are concerned, prima facie, they are complete in all aspects and will be looked into further at the stage of plan approval by this bench.”
NRI billionaire LN Mittal-led ArcelorMittal had opposed the lenders’ decision to approve the Royale Partners’ plan, arguing that it did not having approval from the Competition Commission of India (CCI), as required. ArcelorMittal said the total value of its offer was more than Rs 2,200 crore, including Rs 1,084 crore of fresh equity in EPC Construction India, which owes over Rs 7,200 crore to its financial and operational lenders.
Counsel for the RP argued that prior approval from CCI is a procedural requirement by the CoC, and not a requirement under the law. “The CoC rejected ArcelorMittal’s (applicant) claim, with 77.87% of the CoC voting against the resolution plan. Only 17.67% of CoC voted in favour of the resolution plan and the rest abstained from voting,” said the resolution professional.
“The plan was considered and reviewed by the CoC and it was of the unanimous opinion that it was unsatisfactory.”
“Members of the CoC further believed that viability and feasibility of the (ArcelorMittal) conditions were not satisfactory in nature,” argued the RP.
The RP has already submitted the plan of RPIF for approval to the NCLT and the tribunal will hear the matter on April 30. “The committee of creditors has approved the RPIF plan by giving us 73.17% votes and believes it is, in its commercial wisdom, the better plan,” said Mayur Ghule, managing director of Royal Partners, in an email response. However, he refused to comment on specifics of their resolution plan.
Law firm Khaitan & Co and EY are advising Royal Partners for EPIL. ArcelorMittal spokesperson declined to comment on the matter.
While an email query to Abhijit Guhathakurta of Deloitte, who is resolution professional of EPC Construction India, did not elicit a response till press time.