ArcelorMittal closer to acquiring Essar Steel with Rs43,000-cr offer
22 October 2018
ArcelorMittal seems to have finally won the fight to acquire debt-laden Essar Steel, with a Rs43,000-crore offer to resolve its insolvency, after agreeing to pay Rs7,469 crore to clear overdue debts of Uttam Galva and KSS Petron a day before the top court's deadline ended.
ArcelorMittal pipped rival bidder Vedanta’s offer by nearly Rs2,000 crore. ArcelorMittal had offered Rs35,000 crore upfront to lenders and committed to infusing another Rs8,000 crore into the company.
Against this, Vendata’s offer included Rs35,000 crore upfront and infusion of Rs5,000 crore, and another Rs1,000 crore in three years.
Resolution of the insolvency of Essar Steel, one of the first 12 companies identified by the Reserve Bank of India for immediate resolution under the Insolvency and Bankruptcy Code (IBC), was pending due to a long-drawn legal tussle among bidders.
After a series of legal twists and turns, ArcelorMittal has been selected as the highest bidder for bankrupt Essar Steel, following its decision to pay back outstanding dues. The Lakshmi Mittal company on Friday said that it has been selected as the “preferred bidder” by the committee of creditors (CoC) of Essar Steel.
Essar Steel has outstanding dues of Rs49,000 crore.
On October 4, the Supreme Court declared bids submitted by both ArcelorMittal and Numetal ineligible under Section 29A of the IBC. However, the apex court gave the two bidders two weeks’ time to clear their dues and come clean.
The SC had observed a “looming presence” of Rewant Ruia, the son of Essar Steel’s owner Ravi Ruia, in Numetal even as his stakes were bought by VTB.
The race for the bankrupt yet prized company zeroed down just to ArcelorMittal and Vedanta after VTB-backed Numetal failed to clear its dues within the Supreme Court mandated 2-week extension.