Lenders at heavily indebted Essar Steel filed a petition with the Supreme Court on Friday to appeal the bankruptcy court order that the company’s secured and unsecured creditors should be treated at par. An additional petition will be filed in court by Monday, sources said.

The bankers’ appeal to the Supreme Court is against the order of the National Company Law Appeals Tribunal (NCLAT), which granted Essar Steel’s operational creditors equal status to lenders in the distribution of the amount. of ArcelorMittal’s offer.

Under the NCLAT order, the lenders should have discounted more than initially expected. NCLAT had said secured creditors would only get 60.7% of their Rs 49,473 crore claims while the rest would go to operational creditors, who were to be treated on an equal footing with financial creditors. The Creditors Committee (CoC) had decided that 90% would go to financial creditors and 10% to operational creditors.

The bankruptcy court also approved ArcelorMittal’s offer of Rs 42,000 crore for the acquisition of Essar Steel after rejecting the plea from Ruias (original promoters) to establish the bidder’s eligibility.

The banks’ grouse is that unsecured lenders who have lent money without creating collateral and a higher interest rate are now demanding their pound of flesh while all this time secured creditors have created collateral and lent at lower interest rates. “Some of the unsecured lenders like Standard Chartered Bank require higher payments. They are not direct lenders. Essar Steel has given a corporate guarantee for a loan that Standard Chartered has given to one of the steel company’s subsidiaries, ”said a banker who is part of the consortium.

“NCLAT effectively reduces the power of creditors. If there is no distinction between secured and unsecured creditors then the interest rate will increase for all loans, ”said another banker.