Vedanta, JSW join race for Essar Steel

The race for debt-laden Essar Steel heated up on Monday as Vedanta Ltd. emerged as the third aspirant for the debt-laden steel firm.

AreclorMittal submitted its bid in partnership with Nippon Steel & Sumitomo Metal Corporation (NSSMC) of Japan. The bid was made through ArcelorMittal’s India subsidiary. Numetal had dropped Ravi Ruia’s son Rewant Ruia from the consortium and roped in Sajjan Jindal led-JSW Steel as an investor. Vedanta Ltd., which did not submit its bid last time, has entered the fray now, said sources aware of the development.

Commenting on the bids, Lakshmi Mittal, chairman and CEO ArcelorMittal, said, “The aim of the resolution process is to find a strong, new, capable owner for Essar Steel and maximise returns to creditors. We believe that ArcelorMittal, together with NSSMC, has the most relevant credentials and experience and is the most credible owner for Essar Steel given our decades of steel industry expertise, backed up by industry leading research and development and a wide range of innovative product capabilities.”

A Numetal spokesperson confirmed that the consortium had submitted its bids but declined to comment on the new structure of the consortium partners. “Rewant Ruia is out of the consortium and JSW Steel is in,” said a source without disclosing the financial transaction involved.

JSW Steel has bought Essar Steel promoter Ravi Ruia’s son Rewant Ruia’s 25% stake in the consortium. A senior official in JSW Steel confirmed the development.

‘Most promising market’

Mr. Kosei Shindo, president, NSSMC, said: “India is the most promising steel market in the world, and NSSMC has been seeking opportunities to establish a significant presence in India.”

A Vedanta spokesperson declined to comment on the issue. The Ahmedabad bench of the NCLT has directed the Committee of Creditors (CoC) to not open the financial bids till the matter pertaining to the eligibility of bidders is disposed of by the tribunal.

Both ArcelorMittal and Numetal had moved the tribunal against the rejection of their bids. The case will come up for further hearing on April 4.

Offer details for Bhushan

Meanwhile, Tata Steel has offered ₹35,200 crore in cash and conversion of the remaining debt of about ₹27,000 crore into equity to take over Bhushan Steel, the counsel for the CoC informed NCLT on Monday.

The creditors would get 12.27% equity in Bhushan Steel, said senior advocate Ravi Kadam to the Principal bench of the NCLT.