The Supreme Court of India rendered a judgement on 15 November, 2019 that allowed Luxembourg-headquartered steel producer ArcelorMittal to acquire Essar Steel India. The acquisition will bring the world’s largest steel company into India and make ArcelorMittal the fourth largest steel producer in the country.
The three-judge bench Supreme Court overruled a bankruptcy appellate tribunal’s order that gave secured and unsecured lenders equal right over the sale proceeds. Under India’s fledgling insolvency legislation that was introduced in 2016, the court ruled ArcelorMittal would pay creditors for Essar Steel, which had an overdue debt of $7.6 billion.
Upon completion of the sale, ArcelorMittal will jointly own and operate Essar India in partnership with Nippon Steel Corporation through a joint venture formation agreement. Nippon Steel is Japan’s largest steel manufacturer and the third largest steel company in the world. Last year, ArcelorMittal and Nippon Steel offered to pay $5.8 billion in cash upfront to creditors as part of its bid for the target.
S&R Associates and Luthra & Luthra advised ArcelorMittal on its acquisition and all related proceedings. The committee of creditors was represented by Shardul Amarchand Mangaldas, while the resolution professional was counseled by Cyril Amarchand Mangaldas.