NEW DELHI: ArcelorMittal said Essar Steel ’s creditors put the seal on its acquisition of the bankrupt company, a day after the erstwhile promoters sought to make a last-minute bid to regain control.“Further to ArcelorMittal being named the H1 resolution applicant (the preferred bidder) on October 19, 2018, ESIL’s CoC (committee of creditors) has now approved the company’s resolution plan for ESIL (Essar Steel India Ltd), with the LoI (letter of intent) identifying it as the successful resolution plan,” ArecelorMittal said in a release. The plan has to be formally accepted by the National Company Law Tribunal ( NCLT ), “which is expected before the end of 2018,” it added.The Ruias , founders of the Essar Group, however seem to be unwilling to give up the chase just yet, promising a further test of the country’s Insolvency and Bankruptcy Code (IBC), which was only put in place in 2016. The year-long Essar Steel insolvency saga has seen various twists and turns involving Russian bank VTB, steel tycoon LN Mittal and Vedanta’s Anil Agarwal among others, all seeking to gain control of the prized asset.A person close to the Ruias said they are likely to wait for the response of the CoC to their latest offer before approaching the NCLT. They also have the option of filing a caveat, lawyers said. The CoC filed the plan with the NCLT’s Ahmedabad bench on Friday. It’s likely to be heard after Diwali on November 7.“CoC has to respond within seven days on Essar’s application filed under Section 12A,” said Alok Dhir, managing partner of Dhir & Dhir Associates. ArcelorMittal said two-thirds of the transaction will be funded by debt and the rest through equity.It will involve a payment of Rs 42,000 crore to lenders and another Rs 8,000 crore of capital expenditure on Essar Steel. ArcelorMittal also plans to raise shipments to 8.5 million tonnes in the medium term and ultimately to 12-15 mt through investments in iron ore and steel capacity. Essar Steel currently has a capacity of 6.5 mt.Once the acquisition is completed, ArcelorMittal will jointly own and operate Essar Steel in partnership with Nippon Steel & Sumitomo Metal Corp. (NSSMC), Japan, the third largest steel producer in the world. The two had signed a joint venture agreement to this effect on March 2 “ArcelorMittal and NSSMC expect to finance the joint venture through a combination of partnership equity (one-third) and debt (two-thirds) and ArcelorMittal anticipates that its investment in the joint venture will be equity accounted,” ArcelorMittal said.In a separate statement, the Japanese company said that “by bringing together the strengths of both companies, NSSMC and ArcelorMittal will be able to turn around ESIL to be a competitive steel manufacturer.”The Ruias had submitted a Rs 54,000 crore bid on Thursday to get back control of Essar Steel, just hours after most of the lenders had okayed ArcelorMittal’s proposal. The plan involved repaying all lenders and operational creditors in full. They said the submission had been made under Section 12A of the Insolvency and Bankruptcy Code (IBC), which allows companies to be withdrawn from the resolution process.“In the true spirit of the June 2018 amendment, an opportunity to withdraw from IBC process under Section 12A should not be denied to ongoing cases where EoI (expression of interest) stage was over prior to this amendment,” a Ruia spokesperson said Friday.Essar Steel had been admitted by the NCLT in August last year with an EoI submission date of October 20, 2017. The Ruias want the amendment to be applicable to cases admitted before the amendment. The Ruias’ statement also said that to aid the “ultimate objective of maximisation of value and protection of stakeholders’ interest,” bankers and judicial forums have made exceptions to the law in some instances. It gave the example of ArcelorMittal and Numetal being given the opportunity to remedy their ineligibility by paying dues after the submission of their bids for Essar Steel.“When looked at from operational creditors perspective, the Essar offer may be a fit case for the Supreme Court to exercise its powers under Article 142,” said Jayesh H, cofounder of Juris Corp. If the steelmaking asset located on the western coast of India, in Hazira, Gujarat, is finally awarded to ArcelorMittal, it will help LN Mittal fulfil his quest for a beachhead in the country. Mittal’s plans for greenfield facilities in Jharkhand, Odisha and Karnataka date back to 2005, but these got stuck in the approval process.Essar Steel owes Rs 49,000 crore to various banks and was admitted by the NCLT in August last year following an application by lead banker State Bank of India (SBI). The IBC bars defaulters from bidding for assets. For this reason, ArcelorMittal had offered to repay Rs 7,649 crore of dues owed by Uttam Galva and KSS Petron, in which LN Mittal was listed as a promoter, in addition to an upfront payment of Rs 35,000 crore for loans due from Essar Steel.Vedanta’s bid was pegged at Rs 34,000 crore in the second round of bidding, which was conducted in April 2018. Russian lender VTB formed the Numetal consortium that initially included a Rewant Ruia-promoted trust, which had to be subsequently replaced by JSW Steel, owing to the defaulter clause. However, the Supreme Court said only first-round bidders would be considered.In a ruling on October 4, the apex court directed both ArcelorMittal and Numetal to pay the dues of companies in which they had a stake if they wanted to qualify as eligible bidders. Numetal was edged out of the race owing to its inability to pay the outstanding dues. Two weeks ago, VTB petitioned the Supreme Court asking to be allowed to bid for the company on its own. The petition is likely to be heard next week. However, bankers said that they have made their preference clear at the October 19 meeting.