Claims it cannot be clubbed with other 11 stressed companies against whom RBI has issued a memo for proceedings under the provisions of IBC, 2016
In the petition submitted by Essar Steel in the Gujarat High Court at Ahmedabad, the Ravi Ruia-promoted company has asked for being put in a category that would give it six more months to work out a debt resolution package with its lenders.
It claims Reserve Bank of India (RBI) had "erred" in directing banks to initiate proceedings against the steel major and "clubbing" it along with 11 other companies under the provisions of Insolvency and Bankruptcy Code (IBC), 2016.
The petition, a copy of which is with DNA Money, will be heard today in a court in Ahmedabad.
Essar has claimed that RBI memo, which was issued on June 13, has overlooked several factors while putting it in the same bracket as the 11 other stressed companies with over Rs 5,000 crore loans as on March 31, 2016.
The company is also "surprised" that the central bank had not taken into consideration its "performance" after the cut-off date of March 31 while issuing the injunction against it.
"It is even more surprising the cut-off date for determining has been fixed at March 31, ignoring completely the performance of the account (Essar's) in the next 12 months," the petition says.
Furnishing facts, it further stated it had made payments of Rs 3,467 crore to banks from its daily cash flows after the cut-off date – from April 2016 to June 2017 – as per the "package with bankers".
"Operational performance has improved over the last one year with production level up from 3.8 million tonnes (MT) in FY16 to 5.7 MT in FY17," states the petition filed by Essar.
As per the petition, Essar's restructuring package had been approved by its lenders in principle.
The petition says factors such as past records, non-performance asset (NPA) resolution steps taken, its operational profits and performance over the last two years, etc., had been ignored by RBI while arriving at the "so called objective and non-discretionary criteria for referring accounts for resolution under IBC.
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