The OSPIL’s lenders, notably Srei, provided the funding for the purchase of the pipeline infrastructure. The majority of the lenders to OSPIL also lent money to Essar.
On Thursday, the Supreme Court upheld ArcelorMittal’s resolution plan for the Odisha Slurry Pipeline Infrastructure (OSPIL), rejecting an appeal by Srei Infrastructure Finance that said the plan was unfair in how it distributed debt among creditors in similar positions.
Srei further claimed that because it was a secured financial creditor, it was treated differently than other creditors in a comparable situation, such banks. The appeal of Srei Infrastructure Finance was rejected by a bench under the direction of Justice Ajay Rastogi because it was unjustified. A 253-km pipeline from Dabuna to Paradeep in Odisha was transferred to OSPIL in February 2015 for a consideration of Rs 4,000 crore, free of encumbrance. OSPIL was established as a wholly owned subsidiary of Essar. The lenders of OSPIL, including Srei, funded the purchase of the pipeline asset. The majority of OSPIL’s lenders also lent money to Essar.
Prasanta Patnaik