Numetal is a fully eligible resolution applicant as per the Insolvency and Bankruptcy Code, 2016 (IBC), a Numetal spokesperson said. “Neither Numetal nor its shareholders have any loans overdue with any creditors in India. Aurora, which had minority shareholder interest with 25% equity in Numetal, neither had management role nor any right to directorship in the company. Neither Aurora nor its beneficiary has any loan irregularities with Indian lenders and banks.In any event, Numetal’s other shareholders have already bought out Aurora’s shareholding in the company,” Numetal said. Financial creditors have claimed close to Rs 49,000 crore from Essar Steel. Although it could not be confirmed how much Numetal would have to pay to make itself eligible, sources estimate it could be around Rs 40,000 crore. ArcelorMittal may have to pay around Rs 7,000 crore.

The resolution professional (RP) and the CoC had disqualified ArcelorMittal’s bid since it was considered a promoter of Uttam Galva Steels and KSS Petron, both loan defaulters. Numetal’s bid was held to be ineligible since one of the persons associated with the company, Rewant Ruia, is related to the promoters of Essar Steel. The shareholders of Numetal include Russia’s VTB Bank and engineering firm Tyazhpromexport, financial investor Aurora Enterprises (in which Ruia has an interest) and commodity trading company Indo International Trading.

Rewant Ruia, the son of one of the promoters of Essar Steel Ravi Ruia, is one of the ultimate beneficiaries and owners of a shareholder of Numetal through various holding companies and trusts, Essar Steel’s RP Satish Kumar Gupta had told the Ahmedabad bench of the National Company Law Tribunal (NCLT).

ArcelorMittal, led by billionaire LN Mittal, declined to comment on the matter. However, a senior executive of the company had recently said that if it is a necessity, ArcelorMittal would be willing to repay the debt of Uttam Galva, a company in which it had a 29.5% stake, as a goodwill gesture. Arcelor Mittal was classified as a promoter of Uttam Galva in the stock exchanges. However, it had sold its stake in the company in February before placing the bid for Essar Steel. Since then, it has also been declassified as a promoter of Uttam Galva by the stock exchanges. Uttam Galva owes close to Rs 6,000 crore to its lenders.

In its April 19 order, the Ahmedabad bench of the NCLT had asked Essar Steel’s CoC and RP to reconsider the first set of bids received from Numetal and ArcelorMittal, granting an additional 30 days for the resolution process. It had suggested that the two bidders be allowed an opportunity to rectify their bids to make them eligible.

The NCLT had also observed that inviting a second round of bids without offering bidders an opportunity to rectify their bids was “prima facie invalid”. The second round of bidding took place after the CoC disqualified the first set of bids received from ArcelorMittal and Numetal.

Since then, both ArcelorMittal and Numetal has moved the National Company Law Appellate Tribunal (NCLAT). While Arcelor Mittal has challenged the disqualification of its bids by the RP and the CoC, Numetal has challenged the NCLT’s order. The NCLAT said it would hear both the appeals on May 17.