Lakshmi Mittal owned steel giant ArcelorMittal said on Friday (19) that it has been selected by the Committee of Creditors as a preferred bidder for the debt-ridden Indian firm, Essar Steel.
The world’s biggest steel producer is on a legal battle with other bidders, especially the Russian VTB Bank-backed NuMetal to take over Essar Steel.
“ArcelorMittal confirms it has 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,” ArcelorMittal said in a statement.
“The company will now enter into further final negotiations with the CoC,” it added.
Essar Steel was among the 12 firms referred by India’s central bank, Reserve Bank of India (RBI) for insolvency proceedings.
Last week, ArcelorMittal said that it is ready to pay Rs 74.69 billion to the lenders of Uttam Galva and KKS Petron to become legally eligible to acquire Essar Steel, as per India’s supreme court order.
In the first week of October 2018, the supreme court had provided one more chance to ArcelorMittal and Russia’s VTB Capital-backed NuMetal to bid for Essar Steel after clearing over dues of their related firms within 14 days.
Accordingly, ArcelorMittal had approved a payment of Rs 74.69 billion to the financial creditors of Uttam Galva and KSS Petron to clear their overdue debts. Out of the Rs 74.69 billion payment, around 80 per cent of the fund will be used to settle the debts of Uttam Galva and the rest 20 per cent for KSS Petron, the firm said.
ArcelorMittal has said that its board of directors believes that Essar Steel symbolises a unique and compelling opportunity for the firm to establish a major footprint, with a huge expansion potential in the rapidly growing Indian steel market.