India’s steel company, JSW Steel is planning to obtain legal advice on the possibility of a fresh bid for bankrupt Essar Steel.
The company may consider moving forward independently if its move is sensible in the light of recent order from the supreme court.
Earlier, JSW and Numetal had jointly bid for Essar Steel. The top court in its last order ruled that steel producers, ArcelorMittal and Numetal must clear their respective dues in the Indian banks to meet the eligibility criteria under Indian bankruptcy norms to bid for Essar Steel.
Essar Steel’s bid amount is likely to be around 400 to 450 billion rupees, and JSW is very likely to rope in a PE partner if it is permitted an independent bid.
Meanwhile, the lawyers have noted the final paragraph of the supreme court order which states, if the resolution applicants pay their dues within the period fixed by the court, the companies including another bidder, Vedanta can resubmit their plans to Committee of Creditors (CoC). The CoC has given two months time period to accept the best plan given by the firms.
This directive from the court is being interpreted by group lawyers as an opportunity for the CoC to call for a third round of bids to acquire Essar Steel.
The supreme court order said: “If such payments are made within the aforesaid period, both resolution applicants can resubmit their resolution plans dated…to the Committee of Creditors, who are then given a period of eight weeks from this date, to accept … the best among the plans submitted, including the resolution plan submitted by Vedanta.”
