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Arcelor Mittal enters India by acquiring Essar Steel via IBC route
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After a long-drawn legal battle, the Supreme Court of India on November 15 gave the ruling that ArcelorMittal can acquire Essar Steel for Rs 42,000 crore. The apex court overruled the appellate tribunal NCLAT which asked the banks to share the proceeds equally with the unsecured creditors as well. The apex court's ruling is a landmark in the short history of insolvency and bankruptcy resolution in India. The verdict has clarified on important aspects of insolvency resolution that had been interpreted variously by the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT).
Essar Steel was among the first list of the largest 12 stressed accounts that the Reserve Bank of India had drawn up in June 2017 and asked banks to refer to the NCLT and the company was formally sent to the tribunal on June 27, 2017. In fact, the Ruia family lost control of Essar in July 2017 including Essar Steel. Essar Oil was sold to a Rosneft-led group in 2017. Then last year, Essar Steel, saddled with debt, was auctioned off to ArcelorMittal. However, ArcelorMittal had to wait for taking control of Essar Steel after a judge at the National Company Law Tribunal in July upended the process by declaring that all a troubled company’s creditors — not just its banks — needed to be treated equally. Essar Steel's debt burden has piled up as it owes around Rs 49,046 crore to the financial creditors. SBI has an exposure of Rs 13,222 crore to the company, excluding the working capital it has been extending to the company during resolution process.
To be sure, according to the October 2018 resolution plan, secured financial creditors would recover 92% or around Rs 42,000 crore of their total exposure of Rs 49,046 crore. Following this, the Ruias-run Essar Steel Asia Holding made a counter-offer to pay the entire amount in cash to bankers. But it was rejected the NCLT in January 2019. After this on March 8, the NCLT approved ArcelorMittal's Rs 42,000 crore bid. And on November 15, the Supreme Court had set aside the NCLAT order which gave equal rights to both secured and unsecured creditors of Essar Steel and cleared the decks for its takeover by ArcelorMittal.
We have tried to investigate the legal aspect/challenges arise during CIRP process of Essar steel underInsolvency & Bankruptcy Code, 2016.
Alembic Ltd (Alembic), incorporated in 1907, is part of Alembic group and it is engaged in the business of manufacturing and trading active pharmaceutical ingredients (API) and Real Estate Developments. It also has investment in Alembic Pharmaceuticals Limited (APL). Shreno Limited (Shreno), incorporated in 1944, is engaged in the business of manufacturing and trading of glassware items, machinery and equipments (engineering) required for various industries, making investments and real estate developments. Nirayu Pvt. Ltd. (Nirayu), incorporated in 1971, is currently holding investment in shares and securities of various entities. Current Shareholding of the companies Please Note: 1% OCPS of Shreno limited of book value Rs. 8.71 crores were converted in equity shares by alembic Limited in FY 2018 Therefore the final total investment by Alembic in equity is Rs. 35.13 crores. Alembic acquired 55% stake in Alembic City Limited resulting into WOS of the company
HAL Offshore Ltd (HAL) is an unlisted public company, part of Delhi based MM group and a leading ‘End to End’ solution provider of underwater services and EPC services to the Indian Oil and Gas Industry catering complete need of both offshore and Onshore requirements. The company has two distinct businesses viz., EPC & Vessel Division and Investment Division (consist of investment in real estate, shares and other securities), major clients being ONGC, Oil India and Cairns. Having a Networth of Rs 216.93 crores as on June 30, 2017. Seamec Ltd is a listed public company and a subsidiary of HAL offshore, one of the largest provider of diving support vessel in the Asia Pacific region, has experience in the ongoing subsea inspection, repair, maintenance and light construction required for the efficient and productive support of offshore oil production. The Company has a market cap of Rs 452 crores, shares are listed on BSE and on NSE. Transaction HAL offshore will demerge it
Hindustan Unilever outruns Nestle and bags GSK’s nutrition business in its kitty. This being the country’s biggest consumer goods deal is an all equity deal. Hindustan Unilever Ltd (HUL) , incorporated in 1933 and is a subsidiary of Unilever, one of the world's leading suppliers of Food, Home Care, Personal Care and Refreshment products. Unilever has over 67% shareholding in HUL. HUL is India's largest fast-moving consumer goods company with a heritage of over 80 years in India. HUL operates in four business segments, they are: Personal care includes products in the categories of oral care skin care, soaps, hair care, talcum powder and colour cosmetics. Home Care includes detergent bars detergent powders Foods & Refreshments Water purifier called Pureit The shares of HUL are listed on BSE and NSE and current market cap is ~₹3,86,076 Crores. GlaxoSmithKline Consumer Healthcare Ltd (GSK), is one of the largest players in the Health Food Drinks industry in India
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