The Ahmedabad Bench of the National Company Law Tribunal (NCLT) on Tuesday adjourned the hearing of the insolvency petition against Essar Steel to Monday (July 24), while directing the company to file its objections by Saturday.
Essar Steel had sought an extension on the order to prepare objections.
During the hearing on Tuesday, applicants State Bank of India (SBI) and Standard Chartered Bank (SCB) raised objections to Essar Steel’s plea for extension on the grounds that the defaulter company had enough time for preparing objections during a fortnight-long hearing in the Gujarat High Court, which ended on Monday (July 17). The high court had disposed of Essar Steel’s plea to halt insolvency proceedings against it.
SCB and SBI had independently filed applications for initiating insolvency proceedings against Essar Steel at NCLT’s Ahmedabad Bench for dues of more than Rs 34,000 crore emerging out of its steel plants in Gujarat.
If the Bench admits the company’s reply on Monday, it would result in immediate dissolution of Essar Steel’s board of directors, as an interim resolution professional would be appointed. The professional would get 180 days to come up with a workable solution for the company to repay its loans. This timeline can be extended by 90 days.
A liquidator would be appointed if a solution is not drawn up within 270 days. At least 75 per cent of the members of the committee of creditors would have to approve the solution before it can be filed before the NCLT.
A liquidator would be appointed if a solution is not drawn up within 270 days. At least 75 per cent of the members of the committee of creditors would have to approve the solution before it can be filed before the NCLT.