Essar Dhananjaya joint venture was formed in Indonesia for manufacturing of cold rolled products.
The expansion plan failed due to delay in environmental approvals and non-availability of natural gas, which was necessary for the plant to work at maximum efficiency.
At the time, the company was facing severe liquidity issues because of a drop in commodity prices and a failed expansion plan at its Hazira steel plant.
[9] However, the plan was put on hold after the Ruia family told the lenders that they were willing to sell the company through an M&A process.
The lenders appointed SBI Capital Markets and ICICI Securities as investment bank to look for potential buyers, however, they failed to find investor.
The plan also involved conversion of a portion of the company’s debt into 36 percent equity to be held by the lenders.
[citation needed] National Company Law Appellate Tribunal (NCLAT) passed its order on 7 September 2018 and upheld the resolution professional’s view that the first round of bids submitted in February 2018 were ineligible.
[citation needed] On 4 October 2018, the Hon'ble Supreme Court gave its order thereby removing the ambiguity over the interpretation of the Section 29A of IBC and also upheld the ineligibility decision of the Resolution Professional but also gave another chance to both parties to clear any past outstanding dues and resubmit the Resolution Plan.
Thereafter, ArcelorMittal cleared the dues to the tune of about Rs 7,500 crore to lenders of Uttam Galva and KSS Petron to become eligible to bid for ESIL.
[citation needed] Essar Steel's Resolution Plan was approved on 8 March 2019 with certain modifications with respect to distribution by the National Company Law Tribunal (NCLT).
Mr Aditya Mittal said that the acquisition gives us opportunity to contribute to India's expansion in infrastructure and urbanisation in coming decades.