Essar Steel: Vedanta, Numetal offer to match best bids as lenders review bids

 Vedanta and Numetal have offered to match the best bids for debt-laden Essar Steel, even as lenders gave a chance to the two original bidders – ArcelorMittal and Numetal — to rectify the bids that were initially rejected.

The lenders have decided to abide by the National Company Law Tribunal (NCLT) order to study the proposals by ArcelorMittal and Numetal and give them time to correct the discrepancies in their bids.
The committee of creditors (CoC) to Essar Steel met in Mumbai for the second day this week with a majority of them voting to support the NCLT decision instead of inviting fresh bids. ArcelorMittal and Numetal will now have to make presentations to the CoC, within the one-month period allowed for rectifications. If the CoC does not find either of them to be eligible within that period, it will need to seek more time from the tribunal.
ArcelorMittal on Friday moved the National Company Law Appellate Tribunal (NCLAT) challenging its disqualification from bidding for the assets of bankrupt Essar Steel, saying it had exited from Uttam Galva, another defaulter company, before submitting its bid for Essar Steel on 12 February.
On Thursday, another disqualified bidder Numetal had approached the NCLAT against an order by the Ahmedabad bench of the National Company Law Tribunal (NCLT) that gave ArcelorMittal a chance to clear its dues to banks and become eligible to bid for Essar Steel.
Numetal contended that ArcelorMittal’s bid cannot be given additional time to be rectified as it was received after Section 29 was added to the Insolvency and Bankruptcy Code (IBC). The amendment, which came into effect from November 2017, bars defaulting promoters from bidding for assets under the IBC.
The two-member NCLAT bench, led by Justice SJ Mukhopadhaya, said it would hear both the appeals on 17 May.
The appellate tribunal issued notices to the ArcelorMittal, Numetal, the RP, lead banker State Bank of India (SBI) and the CoC, asking them to respond within a week.
The NCALT decision has the potential to could unleash a bid war among ArcelorMittal, Vedanta and the VTB-led Numetal.
Essar Steel owes lenders Rs44,000 crore in overdue loans and is facing total claims of nearly Rs55,000 crore.