Essar Steel auction to restart after Numetal, Arcelor’s bids rejected
MUMBAI: The insolvency and resolution process of Essar Steel Ltd has come a full circle. On Wednesday, lenders, who are seeking to recover part of the Rs 49,000 crore worth bad debt, have decided to re-invite bids from all six bidders to start the process afresh.
Lenders have also set an April 2 deadline for the second round of bidding.
Of the six, bids from Mauritius-based Numetal and Arcelor Mittal were found ineligible by the resolution professional, prompting the former recently to move the Ahemdabad bench of the National Company Law Tribunal seeking re-eligibility.
However, the Committee of Creditors (CoC), which met here on Wednesday has rejected resolution plans of Numetal and Arcelor under the Insolvency and Bankruptcy (IBC) process and was considering calling in fresh bids. It means, all six companies may now have to re-submit bids for assets of Essar Steel. Besides Numetal and Arcelor, the other four bidders include Nippon Steel & Sumitomo Metal Corporation, Tata Steel, Vedanta Group and Steel Authority of India Ltd.
Essar’s resolution professional Satish Kumar Gupta, who recently did due diligence to determine the eligibility of the bidders, has rejected the proposals of both Numetal and Arcelor under Section 29A of the Insolvency and Bankruptcy Code. This prompted the Mauritius-based Numetal to seek a declaration from NCLT on its eligibility to bid for Essar Steel.
But NCLT’s Ahmedabad bench, in its order dated March 20, said it does not intend to stall the lenders’ meeting or disrupt the resolution process. However, it sought a response to Numetal’s plea from the resolution professional and the CoC. It added that any decision taken by the creditors on Wednesday would be subject to final order of the NCLT. The Numetal plea will come up for hearing on April 4.