New Delhi, Oct 29 (PTI) Top global players including TataSteel, Essar Group and ArcelorMittal are learnt to havesubmitted bids to acquire debt-laden Essar Steel which isgoing through the insolvency resolution process.
Essar Steel India Ltd, an integrated steel producer withan installed capacity of 10 million tonne per annum (MTPA) isundergoing Corporate Insolvency Resolution Process (CIRP)under the provisions of Insolvency and Bankruptcy Code.
The expression of interest (EoI) for the company wasinvited by October 23.
"Essar Group has submitted EoI for Essar Steel. Aresolution plan will be submitted to IRP within the scheduledtime frame," an Essar Group Spokesperson said.
Asked about the rationale for bidding, the spokespersonsaid IBC allows promoters to bid for their company at the NCLTand there are no limitations.
He added that the entire process is on purely commercialbasis and the final selection is done based on the highest bidoffered for the NCLT company.
"This practice of promoters being permitted to bid inbankruptcy/insolvency cases is prevalent in the US, UK andmany developed and developing countries," the spokespersonsaid.
Meanwhile, a source said: "Essar Group, participating inthe bid has submitted EoI for Essar Steel along with a letterof comfort from Russia's VTB capital which is a financialservices company. It is the investment arm of the VTB group.
A global financial services provider, the VTB groupcomprises over 20 credit institutions and financial companiesoperating across all key areas of the financial markets.
The group operates a large international network and themajority shareholder of the VTB Bank is the Russiangovernment, which owns 60.9 per cent of the voting shares.
When contacted with regard to participation in the bid, aTata Steel spokesperson said, "We keep looking at theseoptions, these are all stressed assets in the country. And asa process...we keep looking at these assets."A query sent to world's largest steelmaker ArcelorMittal,however, remained unanswered.
A Vedanta spokesperson, when asked in this regard, saidthe company has not shown any expression of interest.
Essar Steel is among the largest single location steelproducers with a 10 MTPA liquid steel capacity. Besides, ithas beneficiation and pellet making capacity of 20 MTPA spreadacross Vizag and Paradeep.
The company said it has made gross investment of over Rs5,000 crore to set up the facilities. Besides, shareholdershave infused equity of over Rs 16,000 crore till date.
It employs approximately 4,500 persons directly and morethan 30,000 people indirectly.
Among state-owned firms, when contacted, a SAILspokesperson, denied having any knowledge of the steel PSUsubmitting any expression of interest.
Steel Minister Chaudhary Birender Singh had last month,when asked about plans for PSUs acquiring stressed assets ofcompanies in the sector recommended for insolvency, had toldPTI that "As far as stressed assets are concerned, only a fewcompanies are from the steel sector... One of the PSUs maderequest (for acquiring) to the Finance Ministry in thisregard."Promoted by Ruias, who recently exited Essar Oil, EssarSteel was among the initial 12 companies identified by theReserve Bank of India (RBI) for insolvency proceedings.
Led by SBI, lenders in June this year had decided tobegin insolvency proceedings against Bhushan Steel, EssarSteel and Electrosteel Steels by referring them to theNational Company Law Tribunal (NCLT) for recovery under IBC.
The decision was taken at a marathon meeting chaired bythe State Bank of India.
Essar Steel owes about Rs 45,000 crore to lenders. PTINAM ABI SASBT.
This is unedited, unformatted feed from the Press Trust of India wire.