The Luxembourg based steel producer has also promised an additional equity infusion of Rs 80bn whereas Vedanta has offered Rs 50bn.(REUTERS/Mark Blinch/File Photo).

India’s debt-ridden Essar Steel’s lenders have asked Luxembourg headquartered ArcelorMittal to raise its offer to by nearly Rs 40 billion (£419.12 million) take full control of Essar Steel.

With this new development, the lenders have asked ArcelorMittal for an upfront payment of Rs 390bn to take Indian steel firm into their control.

Earlier, ArcelorMittal had offered a direct payment of Rs 350bn and had emerged as the highest bidder. The steel giant had beaten a similar bid from the corporate giant, Vedanta Resources.

The Luxembourg-based steel producer has also promised an additional equity infusion of Rs 80bn, whereas Vedanta has offered Rs 50bn.

The additional demand to raise the offer has also delayed a scheduled voting on the ArcelorMittal offer. Essar Steel’s lenders were expected to vote on the offer on Monday (22).

Earlier, Essar Steel was referred to the insolvency courts in 2017, has debts of Rs 490bn.

ArcelorMittal has already paid Rs 76.49bn to clear the dues of Uttam Galva Steel and KSS Petron in which the steel giant was a significant shareholder. ArcelorMittal was a significant shareholder in two companies, had defaulted on loan repayments, which forced India’s top court, supreme court to ask ArcelorMittal to clear the dues to be eligible to bid for Essar Steel.

In a bid to acquire Essar Steel, Numetal involved in a close legal battle with Arcelor Mittal. Numetal finally moved out of the race after the supreme court asked to clear its dues of up to Rs 370bn.

However, Numetal’s major shareholder, Russia’s VTB Bank had moved to the supreme court to be considered as a single bidder for Essar Steel. India’s top court is expected to hear VTB Bank’s petition this week.

The 1.2 years long legal battle for the 10 million tonnes steel plant, Essar Steel is on its last lap with a late night meeting called by the lenders on Monday (22).

In the meeting scheduled, the Committee of Creditors of the steel plant were likely to electronically vote their preference based on the final offer from ArcelorMittal. However, the voting process didn’t complete as scheduled as the lenders demanded more amount from ArcelorMittal in return to Essar Steel.