The committee of creditors of bankrupt steelmaker Essar Steel India Ltd. approved ArcelorMittal-Nippon Steel's bid on Friday, the company confirmed in a statement.

The resolution plan of the company includes an upfront payment of Rs 42,000 crore and an additional Rs 8,000 crore will be injected to support the operations and increase the production.

The bidding company said it expects the National Company Law Tribunal (NCLT) to accept its resolution plan by the end of this year.

The joint venture between ArcelorMittal SA, the world’s largest steelmaker, and Japan’s Nippon Steel & Sumitomo Metal Corp said it will finance the venture through the equity and debt route.

The joint venture on Friday signed a letter of Intent to buy Essar Steel.

The development comes a day after the billionaire Ruia brothers, owners of Essar Steel India, said the company’s board and shareholders have offered to pay Rs 54,000 crore to creditors to settle their claims, making a last-ditch attempt to retain it and allowing it to exit from a bankruptcy process.

Essar Steel India submitted a proposal to its committee of creditors on Thursday for settlement of the entire claims of the financial creditors, operational creditors, workmen and employees.

Essar Steel is one of the several companies that are among India's biggest debt defaulters that were pushed into the National Company Law Appellate Tribunal (NCLAT), a bankruptcy court, last year after an order by the Reserve Bank of India that was aimed at clearing record bad loans at the country's banks.

ArcelorMittal said last week that it would pay off creditors of two Indian companies, in which it previously held stakes, to bid for Essar.

First Published:Oct 26, 2018 8:57 AM IST