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ArcelorMittal, Vedanta in race for Essar Steel, NuMetal fails to make the cut

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With the Numetal consortium failing to repay dues of Ruia-family promoted companies within the stipulated two week deadline given by the Supreme Court, ArcelorMittal and Vedanta Group are the only two bidders left in the fray to acquire Essar Steel.

ArcelorMittal, Vedanta in race for Essar Steel, NuMetal fails to make the cut
With the Numetal consortium failing to repay dues of Ruia-family promoted companies within the stipulated two week deadline given by the Supreme Court, ArcelorMittal and Vedanta Group are the only two bidders left in the fray to acquire Essar Steel.
The Committee of Creditors (CoC) will meet on Friday to review the eligibility of bidders and deliberate on the resolution plans for the company.
The Supreme Court, in its order dated October 4, had directed both Numetal consortium and ArcelorMittal to clear dues of their delinquent subsidiaries or related companies by October 18 to be eligible to bid for Essar Steel.
The court had said that both the players would be allowed to resubmit their bids that were originally placed on April 2 to the creditors committee only after clearing the dues.
ArcelorMittal along with China’s Nippon Steel, Numetal consortium with JSW Steel and Vedanta Group were the three players that had placed bids for the debt-laden steelmaker in April.
ArcelorMittal, in a statement released on Wednesday, said it had approved the payment of Rs 7,469 crore to lenders of Uttam Galva and KSS Petron to cure itself of ineligibility.
Multiple sources across banks confirmed that the Numetal consortium did not make any payment to lenders of Essar Group companies even as the October 18 deadline ended, making it ineligible to place a bid.
Russia’s VTB, which is the largest partner in the Numetal consortium, has moved the Supreme Court to seek clarity on whether it will be allowed to bid independently for Essar Steel. So far, the Supreme Court has not given any directions on the matter.
Sources added that JSW Steel had written to the Essar Steel committee of creditors recently to be allowed to bid independently as well, but the lenders have not given them a go-ahead as they will conduct the process of sale of the company as directed by the apex court.
Vedanta Group’s Anil Agarwal had told CNBC-TV18 earlier that they have not made an “aggressive” bid for the company. ArcelorMittal is likely to have placed a higher bid than Vedanta, sources added.
Although ArcelorMittal had proposed increasing their bid to Rs 42,000 crore, they had not presented this offer to the creditors. As per the October 4 ruling in the case, only the second round of bids submitted on April 2, 2018 will be considered.
The Essar Steel CoC will open the bids placed in the second round in today’s meeting after ArcelorMittal received a no-dues certificate from the lenders of Uttam Galva and KSS Petron.
Essar Steel is facing claims of over Rs 49,000 crore from its creditors. The CoC has been given an eight-week deadline starting October 18 to finalise the resolution plan for Essar Steel, failing which, it will head intoned liquidation as per the Supreme Court’s order.
 
 
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