New Delhi: The National Company Law Appellate Tribunal (NCLAT) on Wednesday allowed Vedanta Ltd to make an upfront payment of Rs 5,320 crore to lenders for acquiring Electrosteel Steels.

A two-member bench also said this payment would be subject to the outcome of a petition filed by Renaissance Steel challenging Vedanta's bid.

"During the pendency, the parties may act under the approved resolution plan and the resolution applicant may deposit the upfront amount to the committee of creditors," said the NCLAT bench, headed by Justice S. J. Mukhopadhaya.

The bench also clarified that if Renaissance Steel wins the case, the committee of creditors (CoC) will have to return the money to Vedanta. The appellate tribunal also reserved its order over Renaissance Steel's petition.

In a regulatory filing, Vedanta Ltd said the NCLAT "has allowed Vedanta Ltd to acquire Electrosteel Steels Ltd by depositing the upfront payment to the committee of creditors".

On May 17, the NCLAT admitted the petition of Renaissance Steel, challenging Vedanta's bid for debt-ridden Electrosteel. Renaissance Steel's application was rejected by the CoC.

On May 1, the NCLAT had directed maintaining status quo in the case pertaining to the sale of the debt-laden firm to Vedanta Ltd.

Renaissance had submitted before the NCLAT that Vedanta is not eligible to bid for Electrosteel under section 29A of the Insolvency and Bankruptcy Code as one of Vedanta's affiliates in Zambia - a unit of its UK-based parent Vedanta Resources Plc - had been found guilty of criminal misconduct. 

Electrosteel owes lenders more than Rs 13,000 crore, of which about Rs 5,000 crore is to State Bank of India alone.

Last month, the Kolkata bench of the National Company Law Tribunal (NCLT) had cleared Vedanta's Rs 5,320-crore resolution plan for Electrosteel, rejecting objections by Renaissance Steel.