NEW DELHI: An appellate tribunal on Monday dismissed appeals by some creditors of steelmaker Monnet Ispat & Energy against a Rs 2,875-crore resolution plan offered by AION Investments and JSW Steel.
The Mumbai bench of the National Company Law Tribunal (NCLT) had approved the proposal last year. Operational creditors Bharat Heavy Electricals, GAIL India and Bharat PetroResources, and financial creditor IFCI had alleged discriminatory treatment under the resolution plan.
Under the AION-JSW Steel resolution plan, operational creditors are entitled to Rs 25 crore against their total admitted claims of about Rs 450 crore.
IFCI had claimed that the plan discriminated against it relative to other financial creditors. IFCI had claimed that it was entitled to an additional Rs 70 crore over the Rs 95 crore that it was paid under the resolution plan, through its exclusive rights over an asset of Monnet Ispat. IFCI had a total claim of Rs 559 crore against a principal amount of Rs 250 crore.
Financial creditors got just 24% of their loans to Monnet Ispat, against which creditors had total admitted claims of around Rs 11,400 crore. JSW Steel-AION were the sole bidders for Monnet Ispat, which manufactures various steel- and Iron-based products and has a production capacity of around 1.5 million tonnes a year.
This judgement comes after recent amendments to the Insolvency and Bankruptcy Code, passed by Parliament in the Monsoon session, which have clarified that a committee of creditors has the right to take commercial decisions on the distribution of the proceeds of a resolution plan.