Steel baron Laxmi Mittal on Friday met Finance Minister Arun Jaitley regarding the ongoing insolvency process of the debt-ridden Essar Steel amid the media reports that bids by his ArcelorMittal and Numetal Mauritius may get cancelled. Addressing reporters after the meeting, Laxmi Mittal said that ArcelorMittal will create value in Essar Steel with his experience in the related businesses.
“We have put in a well-planned bid for Essar Steel. I think we can that we can create value in Essar Steel,” Laxmi Mittal said, adding that his group has a good experience with the Public-Private Arrangement in Punjab. He, however, declined to comment on the media reports stating that the advisors in Essar Steel’s bidding have recommended disqualification of bids submitted by both ArcelorMittal and Numetal Mauritius under Section 29A of the IBC.
The Section 29A clause of the IBC, the latest addition after it was brought through an Ordinance, bars wilful defaulters, defaulting promoters and related persons from bidding under the insolvency process. According to a Bloomberg report, the bids were recommended to be disqualified due to ArcelorMittal’s involvement in Uttam Galva Steels — a company identified by the Reserve Bank of India in its second list of big corporate defaulters. (Read More)
Similarly, in the case of Numetal Mauritius, the largest shareholder VTB Group — a Russian investment giant — is said to be backed by Rewant Ruia, who is son of former Essar Steel promoter Ravi Ruia. The Russia-based VTB investor group, which is a majority stakeholder, has submitted the bid through its Mauritius-based investment vehicle Numetal.
“No bid has been rejected yet,” Laxmi Mittal said. The committee of creditors (CoC) in the Essar bidding is likely to approach the National Company Law Tribunal (NCLT) regarding a decision on the eligibility issue raised by advisors. Both companies have maintained that no bid has been cancelled and that they are legally eligible to bid for the company.
This story was updated with a correction in the fourth paragraph.