Essar Steel auction: ArcelorMittal, Vedanta, NuMetal-JSW bid in second round

Mail Today Bureau Last Updated: April 3, 2018 | 00:00 IST

The world's biggest steelmaker Arcelor-Mittal, Anil Agarwal-led Vedanta and a consortium of Russia's VTB Capital-backed NuMetal in partnership with Sajjan Jindal-led JSW emerged as the three contesting groups for the acquisition of bankrupt Essar Steel in the second round of bidding on Monday.

In the first round, NuMetal and ArcelorMittal were the only two parties that had bid to take over Essar Steel but the insolvency resolution professional overseeing the auction was advised to reject both the bids owing to their promoters being linked to defaulter companies.

According to sources, NuMetal, majority-owned by Russia's second largest bank VTB Group, dropped Aurora Trust, which has links to Rewant Ruia - son of Essar Steel promoter Ravi Ruia, to qualify for the second round of bidding.

Numetal bought out Aurora Trust's 25 per cent stake and roped in JSW as their new local partner to participate in the bidding round on Monday.

ArcelorMittal, which had been disqualified in the first round for being listed as a promoter of loan defaulter Uttam Galva Steel, bid along with Nippon Steel and Sumitomo Metal Corporation. The Laksmi Mittal-led Arcelor-Mittal had claimed that its bid was valid as it had sold its entire holding in Uttam Galva Steel before the first round of bids in February. However, its name had continued as a promoter on the stock exchanges, resulting in its disqualification.

Sources said Vedanta was the surprise entrant on Monday. Vedanta has already won a bid to acquire bankrupt Electrosteel Steels Ltd in an insolvency auction. confirming bidding for Essar Steel, Anil Agarwal said, ``the company has made a compelling bid. I have put a very lucrative bid. This is a great opportunity... When we want it, we must have it.''

Essar Steel, which has a huge debt burden of around Rs 52,000 crore was among the initial 12 companies identified by the RBI for insolvency proceedings.

Sources said JSW was interested in acquiring Essar Steel after Tata Steel's acquisition of bankrupt Bhushan Steel for Rs 35,200 crore put it in a dominant position. But bankruptcy rules did not permit anyone who had not put in an EoI to bid and so it aligned with NuMetal for bidding on Monday. Rules also bar defaulting promoters from bidding. TyazhPromExports (TPE) of Russia and Indo International are the other shareholders of NuMetal.