Mumbai: Following the Friday order passed by the National Company Law Appellate Tribunal’s (NCLAT) Essar Steel’s lenders have been considering three options, with one likely to be placed before an appellate bankruptcy court on Monday, since they look to finish off the insolvency proceedings they have been dealing with for around two years. The choices include requesting ArcelorMittal to pay the full amount and keep the contentious payments to operational creditors in an escrow account, or just act in accordance with the NCLAT advice in the last hearing on Friday.
Option 3: “Stick to our stand”
“The third option is to stick to our stand that this is the agreed resolution and fight on, assuming further delays. All these options are being debated but there is no consensus as yet,” a banker aware of the developments said.
Lenders, especially state-run ones, are pressured to accept any solution NCLAT recommends as lenders are eager to end the long-pending case before the end of this financial year.
“The third option is to stick to our stand that this is the agreed resolution and fight on, assuming further delays. All these options are being debated but there is no consensus as yet,”
On Friday, the two-judge bench had requested creditors to mull over the option of providing operational creditors 10 percent of the total proceeds, up from 5 percent considered in the agreed plan. The bench recommended creditors to give Standard Chartered more of the dues than what is proposed now, saying a pro rata formula could be applied for all financial creditors.
“Accommodating Standard Chartered difficult”
“Raising the proportion for operational creditors could be considered but accommodating Standard Chartered looks difficult at this stage as it does not have a first charge over the asset,” said another executive involved in the deliberations.