Vedanta top bidder for ailing Electrosteel, ahead of Tatas

Anil Agarwal's Vedanta Resources has submitted the highest bid for bankrupt Electrosteel Steels, topping a Tata Group bid, says an Economic Times report citing sources. The other bidders were Renaissance Group promoted by Abhishek Dalmia and an overseas fund backed by Edelweiss.

The Vedanta bid was said to be worth about Rs4,500 crore, although one person said it may include an additional "sweetener", without providing details. The Tata bid was said to be worth about Rs3,500 crore.

The process is being run in accordance with the Insolvency and Bankruptcy Code (IBC), PwC said in an email without elaborating. Dhaivat Anjaria of PwC is the resolution professional in charge of the Electrosteel insolvency process.

Vedanta and Tata didn't respond to queries. The Vedanta and Tata bids are all-cash offers, said the people cited above.

In October last year, Vedanta executive chairman Anil Agarwal had said in an interview that his group would invest about $9 billion in India over the next few years to expand its hydrocarbons, metals and mining businesses and meet more of India's requirements of these commodities locally, Mint reports.

Electrosteel faces claims of around Rs10,000 crore from financial creditors, or Rs13,000 crore if interest and penalties are added. If these are excluded, Vedanta's offer implies a haircut of 55 per cent for lenders.

State Bank of India is the lead bank and had referred Electrosteel to NCLT in July last year at the direction of the Reserve Bank of India.

The committee of creditors is to meet on Wednesday to consider the resolution plans of the four bidders and decide the next course of action. While the Tata Group has a steel business, the other bidders don't.

Electrosteel is among the 12 companies that RBI had asked banks in June to immediately refer to bankruptcy court.

Lenders had earlier attempted to revive Electrosteel under the strategic debt restructuring scheme that entails a part of the debt being converted into equity and sold to strategic investors. However, a deal to sell the company to First International was called off due to concerns that this would lead to the promoters, the Kejriwals, regaining control.

Electrosteel Casting, also promoted by the Kejriwals, currently has a 45-per cent stake in Electrosteel Steels while the rest is held by the public.