ArcelorMittal a step closer to winning bankrupt Essar Steel; selected highest bidder after it paid dues

By: | Updated: October 20, 2018 1:45 PM

ArcelorMittal made its way back in the race after agreeing to pay Rs 7,469 crore to clear overdue debts of Uttam Galva and KSS Petron just a day before the top court's deadline ended.

Essar Steel was one of the first twelve companies identified for immediate resolution under the Insolvency and Bankruptcy Code (IBC). Essar Steel was one of the first twelve companies identified for immediate resolution under the Insolvency and Bankruptcy Code (IBC).

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 was one of the first twelve companies identified for immediate resolution under the Insolvency and Bankruptcy Code (IBC). It has outstanding dues of Rs 49,000 crore. 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.

ArcelorMittal pipped Vedanta’s offer by nearly Rs 2,000 crore. ArcelorMittal had offered Rs 35,000 crore upfront to lenders and committed to infusing another Rs 8,000 crore into the company, while Vendata’s offer included Rs 35,000 crore upfront and infusion of Rs 5,000 crore, and another Rs 1,000 crore in three years.

Also Read – Essar Steel becomes IBC test case: A timeline of twists and turns in race between ArcelorMittal, Numetal

ArcelorMittal made its way back in the race after agreeing to pay Rs 7,469 crore to clear overdue debts of Uttam Galva and KSS Petron just a day before the top court’s deadline ended. On October 4, the apex court declared bids submitted by both ArcelorMittal and Numetal ineligible under Section 29A of the IBC; however gave them two weeks time to clear their dues.

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The SC had observed that there was 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.

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