Mining News Pro - According to the latest update in Essar Steel’s long-standing bankruptcy case, company’s Committee of Creditors (CoC) has chosen Arcelor Mittal (AM) as the preferred bidder for the insolvent asset ahead of its key competitor Numetal and other contender Vedanta Group.
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According to Mining News Pro -According to the latest update in Essar Steel’s long-standing bankruptcy case, company’s Committee of Creditors (CoC) has chosen Arcelor Mittal (AM) as the preferred bidder for the insolvent asset ahead of its key competitor Numetal and other contender Vedanta Group. However, the final bid price will be negotiated over the weeks to come.

This comes two weeks after the Supreme Court directed both Numetal Mauritius and ArcelorMittal to pay up past debts to be eligible to bid for insolvent Essar Steel Ltd. While only Arcelor Mittal met the Supreme Court directive Numetal failed to do so within the two-week deadline laid down by the apex court, which expired on Thursday this week.

Arcelor Mittal has approved a payment of INR 7,469 crore to the financial creditors of Uttam Galva Steels Ltd. and KSS Petron Pvt. Ltd. to clear overdue debts so that the offer it submitted for Essar Steel India on April 2, 2018 is eligible as Arcelor Mittal was found to be a promoter in both of these non-performing assets.

Numetal, led by Russian financial group VTB, was required to pay INR 49,000 crore—the amount owed by Essar Steel to its debtors. This was because the Supreme Court, after examining the past and present ownership of Numetal, had concluded that “the looming presence of Mr. Rewant Ruia (son of Ravi Ruia, one of the promoters of Essar Steel) has been found all along, from the date of incorporation of Numetal, till the date of submission of the second resolution plan.

With Numetal out of the race on repayment of dues, the company’s lenders had to choose between Arcelor Mittal and Anil Agarwal led Vedanata Group. While both Arcelor-Mittal and Vedanta were very close in terms of the money offered, lenders believed that Arcelor can do a better job in turning around the company and hence chose AM as the preferred bidder.

If the steelmaking asset located in Hazira, Gujarat, is finally awarded to ArcelorMittal, it will fulfill Mittal’s more than a decade-old ambition to have a presence in the country.

Essar Steel, a flagship company of Ruia’s family, is one of the dozen companies against which RBI (Reserve Bank of India) had initiated bankruptcy proceedings last year in Jun’17. According to data published on company’s website, Essar Steel owes INR 49,212 crores to 34 banks, financial institutions, trusts, and other corporate entities, INR 2,581 crore to the creditors, and INR 18 crores to the employees. The company has an integrated steel plant with a capacity of 10 MnT in Hazira, Gujarat.


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