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NPA resolution in jeopardy as failed bidders put spanner

With Anil Agarwal owned Vedanta Ltd emerging the highest bidder, this has led to a lot of heartburn for Abhishek Dalmia, head of Renaissance Group.

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In quick succession, the resolution processes of three big-ticket cases under the Insolvency and Bankruptcy Code (IBC) – Electrosteel Steels, Essar Steel, Binani Cement – are being sought to be delayed by unsuccessful bidders putting a big question mark on the effectiveness of the major reform process to untangle the NPA mess.

Abhishek Dalmia, head of Renaissance Group, a failed bidder for the assets of Electrosteel Steels, has petitioned before the National Company Law Tribunal (NCLT) to prevent resolution professional from entering into negotiation with Vedanta Ltd and Tata Steel till their eligibility is cleared.

With Anil Agarwal owned Vedanta Ltd emerging the highest bidder, this has led to a lot of heartburn for Abhishek Dalmia, head of Renaissance Group.

Dalmia, it has now emerged, has been trying hard to prove that both the rival bidders are not eligible under the contentious Clause 29A of IBC.

"We came to know that two Resolution Applicants, Vedanta and Tata Steel are not eligible to bid as per the Clause 29A of the IBC. Immediately we brought this fact to the knowledge of the Resolution Professional of Electrosteel Steels during our meeting with them on January 31 in the presence of their advisor from Shardul Amarchand Mangaldas. We also sent them mail in this regard along with all the evidences available in the public domain. But RP did not give any cognisance to our allegations," Dalmia has said in a statement issued to the media.

It's not just Dalmia, lobby groups appointed by rival bidders and also fringe interested parties are working overtime to queer the pitch for competing bidders.

Parting with their assets and giving up ownership has never been easy in India, where business promoters hardly had to pay up for loans not repaid or siphoned off.

So bidders are now seeking legal opinion to prove how their rivals are not eligible by digging up data and news about how they have been found to be on the wrong side of the law in distant countries.

Numetal, a consortium of Russia's VTB Group, Tyazhpromexport and Aurora Enterprises with Rewant Ruia as an interested party, had alleged that global steel giant ArcelorMittal is also not eligible.

Arcelor Mittal's owner LN Mittal failed to take remedial measures to revive a little known defaulting group outfit KSS Petron, they said.

"We have invested successfully in many countries and developed a reputation for our ability to turn around distressed assets. Section 29A was not designed to prevent reputed, financially strong businesses from participating," ArcelorMittal had earlier told DNA Money.

And in case of Binani Cement with Dalmia Bharat emerging as the highest bidder outbidding UltraTech by about Rs 100 crore, the latter is not happy and has approached the NCLT, seeking clarity on the evaluation of all the bids considering the company's background, experience and ability to pay upfront.

The final decision on Essar Steel slated for Monday has been deferred to take note of such issues raised over the eligibility of bidders.

Sparring time

Renaissance Group, a failed bidder for Electrosteel Steels, has petitioned NCLT 
Numetal has alleged that global steel giant ArcelorMittal is not eligible for Essar Steel bid

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