Arcelor Mittal Submits Revised Bid with an Increased Offer to Acquire Debt Laden Essar Steel

According to Mining News Pro - Arcelor Mittal, world’s largest steelmaker is leaving no stone unturned to acquire bankrupt Essar Steel as it has offered INR 42,000 crore to repay the creditors of Essar Steel under the insolvency and bankruptcy process, as informed by the market sources. This offer is higher than its previous offer of INR 30,000 crore.

The company has also committed to pay INR 7,000 crore to settle the dues of Uttam Galva and KSS Petron, in which the Luxembourg-based steel producer is classified as the promoter.

ArcelorMittal’s offer for Essar Steel is higher than what VTB Capital-led Numetal had offered in the second round of bidding. Numetal’s offer stands at around INR 37,000 crore as repayment to financial creditors.

The Mauritius-based investor will offer an additional INR 2,000 crore to lenders of Odisha Slurry Pipeline Infrastructure Ltd., which brings in about half of the raw materials that Essar Steel’s plant needs.

Last week on Friday, the NCLAT (National Company Law Tribunal) ruled that Numetal`s second bid for insolvent Essar Steel was eligible, and had asked ArcelorMittal to first clear its dues by September 11 to turn eligible. The NCLAT in its judgment had also allowed the lenders to further negotiate bids for Essar Steel in order to maximise value.

The second round of bids submitted by both Numetal and Arcelor Mittal was supposed to be opened today as was informed by the resolution professional to the lenders and before the bids were opened, Arcelor Mittal submitted its increased offer.

The committee of creditors is now expected to take a call on which bidder they find most suitable.

Essar Steel which has an integrated steel plant of 10 MnT has been facing insolvency proceedings for over a year. As of March 2018, the company had an outstanding debt of INR 50,786 crore.