Given the Supreme Court has already outlined the way forward after hearing all the arguments under the Insolvency and Bankruptcy Code (IBC), it would appear the steelmaker must approach the apex court for permission to throw its hat in the ring.
The Sajjan-Jindal promoted JSW Steel wants to go solo in the race for bankrupt steelmaker Essar Steel. JSW Steel had earlier bid for Essar Steel together with Numetal. Given the Supreme Court has already outlined the way forward after hearing all the arguments under the Insolvency and Bankruptcy Code (IBC), it would appear the steelmaker must approach the apex court for permission to throw its hat in the ring.
MV Seshagiri Rao, joint managing director, JSW Steel, said on Tuesday that the company was seeking legal opinion on whether it would be eligible to bid for Essar Steel together with ArcelorMittal, Numetal and Vedanta. “It depends upon the legal opinion which we get and the views of the commitee of creditors and the resolution professional (RP). If they take a positive view, then we are open to look at it. We are seeking a legal opinion and based on that opinion we will take a call,” Rao said.
The VTB Capital-led Numetal would be eligible to bid for Essar Steel, provided the company pays off its dues of Rs 49,000 crore. While ArcelorMittal is understood to have agreed to pay Rs 42,000 crore, Numetal’s bid for Essar Steel is believed to be in the region of Rs 37,000 crore. The Anil-Agarwal promoted Vedanta is willing to pay a slightly smaller sum of around Rs 35,000 crore.
On October 4, the apex court gave both Numetal and ArcelorMittal a final chance to clear their “taint of disqualification” by clearing the dues to their respective creditors that they were associated within two weeks.
Subsequently, the CoC will, over a period of eight weeks, deliberate on the proposals and accept, by the requisite majority of 66%, the best amongst the plans submitted.
The apex court also made it clear that should the CoC not find any of the plans acceptable, Essar Steel would go into liquidation.
It is not surprising JSW Steel wants to buy Essar Steel given its ambitions of owning 25 million tonne of steelmaking capacity in India in near term; it currently owns 19.5 million tonne. Tata Steel has already bought Bhushan Steel and has a total capacity of just over 19 million tonne in India. If it gets control of Bhushan Power and Steel, it would be able to add nearly 3 million tonne of capacity. State-owned SAIL has 21 million tonne of capacity. Vedanta has entered the steel sector with the purchase of Electrosteel Steels via the IBC route.