Arcelor’s $5.9 Billion Purchase to Aid India Bad Loan Clean Up
- India’s top court rejects lower tribunal order on payment
- Verdict sets precedent for faster resolution of future cases
Workers load items onto a truck at the Essar Steel Pune Facility near Pune in Maharashtra, India.
Photographer: Dhiraj Singh/BloombergArcelorMittal’s $5.9 billion takeover of an Indian steel mill is a shot in the arm for lenders, which have been armed with legal backing to tackle bankruptcies in a country that has one of the world’s worst bad-loan ratios.
Friday’s decision by the Supreme Court not only ended tycoon Lakshmi Mittal’s long wait to enter the world’s second-biggest steel market, but also empowered banks to set the terms of the distribution of sale proceeds between different creditors. The court allowed Arcelor to pay creditors for Essar Steel India Ltd. and scrapped a bankruptcy appellate tribunal’s order that gave secured and unsecured lenders equal right over the proceeds.