Will VTB-JSW consortium qualify for Essar Steel bid?

After the submission of bids for Essar Steel on Monday, ArcelorMittal and its partner Nippon Steel questioned the inclusion of Sajjan Jindal's JSW Steel in the Numetal consortium. JSW had replaced Aurora Enterprises Mauritius, a Singapore-based trust controlled by estranged promoter of Essar Steel Rewant Ruia--- son of Essar co-founder Ravi Ruia. What are going to be the possible outcomes?
 
The resolution professional will check the eligibility of the VTB-JSW consortium, which is called Numetal. The basic issue was the absence of JSW Steel during the time expression of interest (EoI). The question here is whether Insolvency and Bankruptcy Code (IBC) restricts changes in the shareholding pattern of the potential bidders. Ideally, it should not a problem especially when the high-level panel, which reviewed IBC, suggested simplifying the code for larger participation in the bids for distressed assets. In addition, it is not the majority stakeholder which has changed, says a corporate lawyer.
 
If the resolution professional disqualifies Numetal, the remaining serious bidder will be ArcelorMittal and the bargaining power of the secured and unsecured lenders will be lesser. Besides, VTB-JSW may question the decision legally. In the case of Binani Cement bid, the court had advised the committee of creditors (CoC) to consider the out-of-court proposal of UltraTech --- which is Rs 700 crore more than the highest bidder Dalmia Bharat's offer. The CoC is yet to come up with their views.
 
The third scenario is Vedanta of Anil Agarwal emerging as the highest bidder. It was not part of the first round of bids. Agarwal told media that Essar is one of the finest steel plants and India's steel industry is poised to grow rapidly. Vedanta's balance sheet is strong and they can easily take $5 billion of additional debt, he said.