India’s Supreme Court on Nov. 15 said operational creditors could not be treated on a par with financial creditors of a bankrupt company.
The ruling clears the path for ArcelorMittal, the world’s largest steelmaker, to complete its $6 billion bid for Essar Steel through the country’s insolvency regime. The ruling squashes a decision by a separate court that ruled lenders and operational creditors would have parity. That decision threatened a move by the creditor committee to give secured lenders a recovery of 90% on their claims, compared with about 20% for operational creditors with dues over a certain size.
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