NEW DELHI: THE Committee of Creditors (CoC) of Essar Steel have picked ArcelorMittal as the winning bid for the insolvent company, said reports on Friday. The initial three-sided race for the company between ArcelorMittal, Vedanta and Numetal had come down to two sides after Numetal failed to fulfil the eligibility criteria set down by the Supreme Court.
ArcelorMittal, however, had said on October 17 that it has approved a payment of Rs 7,469 crore to the creditors of Uttam Galva Steels Ltd and KSS Petron Pvt Ltd in order to clear overdue debts and become eligible.
However, the CoC of Essar Steel has picked ArcelorMittal’s bid, said multiple reports on Friday evening. While Vedanta’s bid had been the highest in the initial round of bidding, ArcelorMittal had upped the ante during the second round at Rs 35,000 crore upfront and Rs 8,000 crore as capital infusion into the firm. It had also offered to raise the upfront payment to Rs 42,000 crore. Essar Steel owes its lenders over Rs 50,800 crore. Essar Steel’s lenders are now expected to meet on Saturday to re-negotiate bid amounts, with ArcelorMittal likely to be asked to pay Rs 42,000 crore.
Earlier in the day, Anil Agarwal of Vedanta Ltd, had said that his company was best-suited to take over Essar Steel, and noted that Vedanta’s bid of Rs 35,000-36,000 crore in the first round of bidding was higher than the other offers. “I continue to be interested in Essar Steel (despite being in bitter acquisition fight),” he said.
Asked if he would be open to raising the offer price, he said he was “open to everything,” but wants to wait and see how the other two rivals act on conditions set by the Supreme Court for their eligibility. The CoC has been given an eight-week deadline starting October 18 to finalise the resolution plan for Essar Steel, failing which it will head toward liquidation as per the SC order.