Lenders to bankrupt Essar Steel Ltd are considering increasing a payout to Standard Chartered Plc to expedite the sale of the company to ArcelorMittal, according to people with knowledge of the matter.
The move by the lenders is part of an attempt to complete Essar Steel’s sale by the end of March, the people said asking not to be named as the information is not public. Standard Chartered has filed a plea to National Company Law Appellate Tribunal (NCLAT) opposing a decision by a lower court to sell Essar Steel to ArcelorMittal, world’s largest steel producer.
Standard Chartered is opposing the sale to ArcelorMittal as it faces losing a substantial part of monies it has extended to Essar under the deal, according to people familiar with the matter. The National Company Law Tribunal (NCLT) last week approved ArcelorMittal’s offer to buy Essar Steel after months of court battles.
Standard Chartered declined to comment.
State Bank of India didn’t respond to an email seeking comment.
A committee of creditors (CoC) to Essar Steel, led by State Bank of India, will consider distributing nearly ₹3,000 crore ($43 million) to Standard Chartered and operational creditors, the people said. While the exact amount that would go to the UK lender isn’t decided, the amount that the committee had previously agreed to pay the bank was only ₹4,200 crore, the people said.