A team led by Aditya Mittal, group chief financial officer and chief executive officer, ArcelorMittal Europe, is conducting due diligence of Essar and Bhushan Steel plants, upping the tempo of the court-led insolvency process for stressed steel assets.
Mittal was in India last week with a team of about 40 people for the due-diligence exercise, multiple sources said.
On being asked about it, ArcelorMittal said that members of the management team were conducting due diligence on steel assets available through the current insolvency process.
“India is a high-growth market, and therefore, of interest to ArcelorMittal. We remain in active discussions with SAIL to establish an automotive steel joint venture in India, in line with the ‘Make In India’ initiative. We remain committed to the project, which we believe is beneficial to both SAIL and ourselves. Reaching agreement on the joint venture is a priority for ArcelorMittal. Additionally, we can confirm that members of our management team are conducting due diligence on steel assets available through the current insolvency process,” the statement from ArcelorMittal read.
ArcelorMittal has already submitted an expression of interest (EoI) for Essar Steel. For Bhushan Steel, companies have to submit resolution proposals by December 23. Due diligence by different companies is currently on. ArcelorMittal, which is conducting the exercise for Bhushan Steel, is expected to submit a resolution proposal for Bhushan Steel. For Essar Steel, too, resolution proposals would have to be submitted by December 23.
ArcelorMittal has been looking to gain a major foothold in India for a while now. It appears that the world’s largest steelmaker is vying for the larger assets currently going through the insolvency process.
In July, a team from SBI Capital Markets — an advisor to lenders on restructuring packages for some of the companies — had visited London to meet the senior management of ArcelorMittal. The idea was to get ArcelorMittal to participate in the bidding of stressed assets.
Among the 12 stressed accounts referred by the Reserve Bank of India for insolvency proceedings, five are from the steel sector: Bhushan Steel, Essar Steel, Bhushan Power & Steel, Monnet Ispat & Energy, and Electrosteel Steels. Among them, Essar Steel, with a capacity of 9.7 million tonnes (mt) and Bhushan Steel, having a 5.6-mt capacity, are the larger ones.
In 2005, ArcelorMittal came to India with grand plans of setting up a mega steel plant. It signed a memorandum of understanding (MoU) with the Jharkhand government for setting up a 12-mt plant in the state. A year later, the company signed another MoU with the Odisha government for a similar-sized plant in that state. Neither project, however, made much headway.
Source: Business-Standard