Home / Business and Economy / AM/NS Settles Essar Promoter Guarantees for Rs 200 Cr
AM/NS Settles Essar Promoter Guarantees for Rs 200 Cr
1 Jul
Summary
- AM/NS paid banks Rs 200 crore for Essar promoter personal guarantees.
- This completes a residual part of the Essar Steel resolution plan.
- The transaction involved State Bank of India as the lead creditor.
ArcelorMittal Nippon Steel India (AM/NS) recently concluded a significant part of the Essar Steel resolution by paying Rs 200 crore to banks. This payment officially transferred the personal guarantees of Essar promoters, Prashant and Ravi Ruia, to AM/NS.
The transaction, which occurred earlier this month, involved the lead creditor, State Bank of India, and finalized residual liabilities from the 2019 resolution. AM/NS assumed these claims after a Swiss challenge auction concluded without competing bids.
Banks had initially sought Rs 200 crore for the promoter guarantees, representing residual liabilities of Rs 13,751 crore after accounting for recoveries from Essar Steel's resolution. These claims, along with corporate guarantees, were put up for sale on an 'as-is basis'.
AM/NS's takeover of these dues was an integral part of its 2019 resolution plan for Essar Steel. Lenders had previously recovered nearly 90% of their dues from the company. Personal guarantees came under bankruptcy purview in December 2019, enabling separate recovery actions against promoters.
