The resolution of Essar Steel may go Binani Cement way, with the operational creditors moving to NCLT demanding that they be paid in full, in line with full settlement of the financial creditors.
The selection of Dalmia Bharat as the successful applicant for Binani Cement was opposed by operational creditors, and the case is yet to be resolved, though UltraTech was eventually selected.
The ArcelorMittal-Nippon Steel joint proposal approved by the Committee of Creditors promises to pay up the financial creditors in full; while that of the promoters of Essar Steel, the Ruias, promises to settle dues of the operational creditors as well.
Operational creditors of Essar Steel got admitted dues of Rs 5,058 crore though they have claimed an aggregate Rs 27,080 crore, as per creditors' list.
Such creditors, mostly suppliers of goods and services to the company, including several government owned entities, want their share in a way the operational creditors of Binani Cement have been demanding for long.
Creditors like GPI Textile and Bharat Petroleum has already moved the Ahemedabad bench of NCLT and their cases would be taken up later this month, NCLT record shows.
These companies have dues of about Rs 465 crore and Rs 262 crores respectively.
NCLT would hear all caveats of operational creditors starting November 28.
Essar promoters have submitted a proposal to the Committee of Creditors for full settlement of the entire admitted claims of the financial creditors, operational creditors, and workmen and employees aggregating Rs 54,389 crore, under Section 12A of the Code.
"It should be a priority in every resolution process that the dues of operational creditors are settled fully. In most cases, small and medium businesses form about 80-90% of total dues to such category of creditors. Their very survival depends upon settlement of their dues. It's encouraging that suppliers to Essar Steel are now planning to approach NCLT like we did," Rajesh Tibrewal, spokesperson of operational creditors of Binani Cement, said.
As in Essar Steel case, during the resolution process of Binani Cement, UltraTech revised its bid upward to Rs 7,960 crore, which was about Rs 1,000 crore higher than Dalmia Bharat's offer of Rs 6,590 crore.
The higher offer included settlement of operational creditors as well.
Binani Operational Creditors Forum was formed with the sole purpose of having their say preferred UltraTech over Dalmia Bharat, as the latter doesn't intend to pay off all the dues of Binani.
BATTLE FOR STEEL
- ArcelorMittal-Nippon Steel joint proposal approved by the Committee of Creditors promises to pay up the financial creditors in full
- The bid by promoters of Essar Steel has promised to settle dues of the operational creditors as well.
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