The National Company Law Tribunal has advanced the hearing on Essar SteelBSE 0.41 % dispute to Tuesday, March 27, from April 4 as the ruling needs to be pronounced before the second round of binding bids takes place.
SSG Capital, Numetal, Arcelor-Mittal, VedantaBSE -1.66 % Resources, Tata SteelBSE 0.06 % and Nippon are among the six entities that initially showed interest in acquiring the steel company owned by the Ruia family. The resolution professional, Satish Gupta, has set April 2 as the last date for giving binding bids for Essar Steel that owes over Rs 49,000 crore to banks.
Banks led by State Bank of India, last week, voted in favour of inviting bids from six companies which had submitted expressions of interest (EoI) after the resolution professional declared that both the bids — from ArcelorMittal and Numetal — as ineligible.
Numetal moved the Ahmedabad bench of bankruptcy court stating that the structure of their bids be considered eligible for acquiring the distressed company under bankruptcy law.
“The company has sought for an early hearing so that clarity emerges before the date of submission of binding bids,” said a senior official. Last week, 98.5% of lenders by value of loan voted for a second round of bidding by inviting only those who gave expression of interest. In effect, large companies like JSW Steel would not be eligible to give binding bids.
Lenders say that SSG Capital may submit a bid in partnership with a strategic investor or a steel company. ET has reported that Tatas and Vedanta Resources may not be interested in bidding for Essar Steel. Prior to ArcelorMittal’s bid being rejected, Japan’s Nippon Steel has announced that it would partner with ArcelorMittal to acquire Essar Steel if their bid is selected. It is not yet clear if the two will partner for the second round of bidding.
Tata Steel, which had shown interest earlier, is set to acquire Bhushan SteelBSE 3.48 % as well as Bhushan Power — both facing bankruptcy proceedings. Similarly, Vedanta Resources is the likely to be the highest bidder for Electrosteel Steels. Numetal is a consortium led by Russia’s VTB Capital that includes the Aurora Trust owned by Rewant Ruia, which has a 25% stake. He is a member of the Ruia family that’s the promoter of Essar Steel. Promoters of Essar are not eligible to bid unless they repay their dues with banks. In the past, officials from Numetal have said that it’s open to making changes in the consortium if Aurora’s inclusion isn’t in line with the rules. The other partners in the Numetal consortium includes TyazhPromExports (TPE) of Russia and Indo International.
Both the bids of ArcelorMittal and Numetal were rejected on technical grounds and a second round of bidding will enable them to rectify the structure of their proposal so that they are eligible, said the official quoted above.
Source: Economic Times