Vedanta group has now emerged as a front-runner in the race to purchase Essar Steel considering that the acquisition expenditure of the ArcelorMittal has climbed by at least Rs 70 billion when compared to its rivals in the bidding process.
Another bidder, Numetal is currently almost out of the competition, according to lenders.
Vedanta had said in the second round of bidding that it was ready to pay Rs 350bn for Essar Steel.
India’s top court, supreme court orders that the committee of creditors would look at all the bid including Vedanta to acquire Essar Steel.
The offers of ArcelorMittal and Numetal would also be considered if the duo pays their dues to become eligible to take part in the bidding process.
Dues of ArcelorMittal owed firms Uttam Galva Steel and KSS Petron are close to Rs 70bn to Indian lenders. They need to repay the dues to the lenders first before bidding for Essar Steel, according to a supreme court order.
India’s JSW Steel, which had co-operated with Numetal for making an offer for Essar Steel in the second round, is not curious about going moving further without a companion. The lenders have moved ahead with Vedanta even if some of the bidders raised questions about Vedanta’s environment, illegal mining and human rights background.
The lenders have also said that they are ready for another bid if they are not satisfied with the offers received.
Essar Steels dues are around Rs 372bn as on March 2017, according to the reports. Essar Steel was sent to the National Company Law Tribunal for loan resolution under insolvency and bankruptcy code 2016.
Vedanta's offer was made during the second round of bidding. However, both Numetal and ArcelorMittal had raised their offers to Rs 420bn to the lenders before the supreme court.
Now, both companies have asked by the supreme court to pay their over dues before bidding. The court’s decision is expected to indirectly help Vedanta, sources said.
On a positive side of the entire story, the banks will get 100 per cent of their dues in Essar Steel debt resolution.
Essar Steel runs a gas powered 10 million tonnes per annum plant in India’s Gujarat state.
The firm witnessed huge losses after Maoists blew up its slurry pipeline system in Chhattisgarh state.
The company had also faced criticism for cheaper steel dumped by China for its losses.
Traditional roots struggling to adapt to the fast-changing, AI-driven landscapeiStock
This unified approach is intended to provide gamers with a seamless, console-like experienceMicrosoft
