NEW DELHI: With Essar Steels lenders picking ArcelorMittal’s offer as the winning bid on Friday, the company is looking to complete the negotiations as “swiftly as possible”. In a statement, ArcelorMittal confirmed that it had been informed by “the Committee of Creditors (CoC) for Essar Steel India Limited (ESIL) that it has been evaluated to be the H1 Resolution Applicant (the preferred bidder) in the corporate insolvency resolution process for ESIL”.
“Now, we look forward to completing negotiations as swiftly as possible,” it said.
The Lakshmi N Mittal-owned company has been involved in a tight race with Vedanta Resources and Russian VTB Bank-promoted NuMetal to take over Essar Steel. With the Supreme Court ruling that both ArcelorMittal and NuMetal would have to settle dues of other subsidiaries before becoming eligible to bid for Essar Steel, only the former managed to comply on time.
In a statement last week, the company said that “in-line with the Indian Supreme Court ruling dated 4 October, 2018, it has approved a payment of `7,469 crore (approx $1 billion) to the financial creditors of Uttam Galva and KSS Petron to clear overdue debts in order that the offer it submitted for Essar Steel India Limited (ESIL) on 2 April 2018 is eligible and can be considered by ESIL’s Committee of Creditors (CoC)”.
Consequently, with only Vedanta and ArcelorMittal left in the race, Essar Steel’s CoC picked the latter on Friday. While Vedanta’s bid had been the highest in the initial round of bidding, ArcelorMittal had upped the ante during the second round offering `35,000 crore upfront and `8,000 crore as capital infusion into the firm. It had also offered to raise the upfront payment to `42,000 crore. Essar Steel owes its lenders over `50,800 crore.
The world’s largest steelmaker has been trying to get a foothold in India for a long while, with plans announced for two plants with 12 million tonnes of capacity a decade ago. However, the planned factories — at Jharkhand and Odisha — did not materialise.