GAIL and Gujarat Energy Transmission Corporation (Getco) have joined a group of operational creditors looking to have ArcelorMittal’s INR 42,000 crore resolution plan for Essar Steel rejected unless their claims are added to the proposal.
As per trusted sources, the two state-owned companies have submitted separate applications for claims equaling nearly INR 1,800 crore at the National Company Law Tribunal in Ahmedabad.
Previously, Essar Steel’s committee of creditors had picked ArcelorMittal’s proposal for their firm. Under the plan, the financial creditors will receive INR 41,987 crore out of the total dues worth INR 49395 crore, while operational creditors are projected to get only INR 214 crore against their outstanding dues of INR 4,976 crore.
Recently, 29 operational creditors of Essar Steel had submitted petitions at the National Company Law Tribunal, pleading for ArcelorMittal’s plans to be rejected. They wanted the debt settlement proposal formulated by Essar Steel’s shareholders to be considered since it can repay all outstanding debts of both financial and operational creditors.
According to sources familiar with the development, in 1999, Getco set up a subsidiary of Gujarat Electricity Board and filed the application under the Section 60 of the Indian Insolvency and Bankruptcy Code and regulation 14 of the Insolvency and Bankruptcy Board of India Regulations 2016, expecting suitable orders and directions to include its total claim worth INR 896.52 crore and has solicited rejection of the resolution plan if these terms are not met.
Getco stated that these dues relate to power transmissions and wheeling charges from 2005 to 2011, while the resolution professionals for Essar Steel are only admitting a nominal claim of INR 1.
As per the application filed by GAIL, the company claims to have a gas supply agreement with Essar Steel under which obliged by law Essar is entitled to make payment to GAIL.
Reportedly, Essar Steel Asia Holding Ltd had proposed to pay INR 54,389 crore to repay dues of all financial and operational creditors in a bid to uphold its ownership of the firm, cite sources.