Essar Steel auction: Numetal moves NCLT to prove its bid eligible

In a move that will add to the complexity of Essar Steel's auction, Numetal has moved the Ahmedabad bench of the National Company Law Tribunal (NCLT), seeking a declaration that its bid for the stressed steel company is eligible.

The development comes at a time when the resolution profession overseeing the auction is meeting Essar Steel's lenders in Mumbai.

Numetal, which is majority owned by Russia's VTB Capital, has submitted its application to the NCLT on Monday, March 20.

The company, which along with ArcelorMittal had submitted bids for Essar Steel on February 12, has apprehension that its resolution plan may not be considered by the Committee of Creditors that is made up of the lenders.

"Numetal apprehends that full facts submitted by Numetal for determination of its eligibility to submit a Resolution Plan have not been appropriately assessed," the company said in a press release.

"The Hon’ble NCLT, on hearing the counsel appearing for Numetal, issued a notice to the Committee of Creditors (COC) through the Resolution Professional. The Hon’ble NCLT also observed that any decision taken or resolution passed by the COC in the meeting on 21^th March 2018 would be subject to the outcome of the Application," said the company.

The next hearing is on April 4.

All eyes will be now on the meeting between the RP and the CoC.

Earlier, doubts have been raised over the bids presented by Numetal and ArcelorMittal.

Numetal's minority shareholder Rewant Ruia is the son of Essar Steel co-founder Ravi Ruia and thus could be defined as a "connected person" under the IBC clause that prevents promoters of defaulting companies from bidding.