Declared highest bidder by CoC to acquire the bankrupt firm, pips Anil Agarwal’s Vedanta.
The committee of creditors of Essar Steel on Friday declared ArcelorMittal as the highest bidder for the bankrupt Essar Steel, pipping Anil Agarwal’s Vedanta Group.
In the second round of bids, ArcelorMittal had offered upfront Rs 35,000 crore to the lenders and had committed to infuse another Rs 8,000 crore into the company. Subsequently, the company had proposed to increase its upfront offer to Rs 42,000 crore but the Supreme Court had said that once the company cured its ineligibility its bid placed on April 2 (the second bid) is to be considered.
Vedanta, which had placed its bid in April, had committed around Rs 35,000 crore upfront to the lenders and another Rs 1,000 crore after three years. It had offered to infuse Rs 5,000 crore into the company.
Friday’s development comes after the race to acquire the bankrupt firm finally zeroed down between ArcelorMittal and Vedanta Group with the Numetal consortium which was earlier the chief rival of ArcelorMittal failing to pay the dues of the Ruia family promoted companies, which stands at Rs 49,000 crore within the stipulated two week deadline given by the Supreme Court as per its October 4 order. Accordingly by October 18 the concerned companies were supposed to clear their dues if they were to bid for Essar Steel.
The October 4 order of the SC had directed both ArcelorMittal and Numetal to clear the dues of their related companies by October 18 to be eligible to bid for Essar Steel.
The court had said that both the players would be allowed to resubmit their bids that were originally placed on April 2 (the second bid by Arcelor and Numetal) to the CoC once they clear their dues.
ArcelorMittal had said on Wednesday that it had approved the payment of Rs 7,469 crore to lenders of Uttam Galva and KSS Petron to cure itself of ineligibility. According to banking sources, Numetal consortium did not make any payment to the lenders of the Essar Group till October 18 when the deadline ended. Russia’s VTB, which is the largest partner in the Numetal consortium has moved the SC to seek clarity on whether it will be allowed to bid independently of Essar Steel but so far there has been no direction from the apex court.
ArcelorMittal along with Japan’s Nippon Steel, Numetal consortium with JSW Steel and Vedanta Group were the three bidders who had bid for Essar Steel.
After the SC order, JSW Steel was understood to have written to the CoC to be allowed to bid independently but did not get the approval.