ArcelorMittal on Friday emerged as the highest bidder to buy the debt-laden Essar Steel undergoing insolvency proceedings. ArcelorMittal has offered Rs 35,000 crore as an upfront payment and Rs 8,000 crore as a capital infusion in to Essar Steel.
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It has been informed by the Committee of Creditors (CoC) that ArcelorMittal has been evaluated to be the H1 Resolution Applicant (the preferred bidder) in the corporate insolvency resolution process for Essar Steel, the Lakshmi Mittal-led firm said in a statement.
On the other hand, another bidder Vedanta offered to pay around Rs 35,000 crore as upfront payment and Rs 5,000 crore as a capital infusion.
Essar Steel is facing claims of over Rs 49,000 crore from its creditors. The CoC had 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.
ArcelorMittal and Vedanta Group were the only two bidders left in the fray to acquire Essar Steel after Numetal consortium failing to repay dues of Ruia-family promoted companies within the stipulated two-week deadline given by the Supreme Court.
#RaceForEssarSteel | ArcelorMittal declared highest bidder by Essar Steel lenders https://t.co/poRSJlD8Xv
— CNBC-TV18 (@CNBCTV18Live) October 19, 2018
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.
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.
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.