IDBI Bank rejects Mauritius-based Royal Partner\'s discounted offer for Essar arm
NEW DELHI: IDBI Bank rejected a revised offer from Mauritius-based Royal Partner for Essar group arm EPC Constructions, after the investor sought a 10% discount on its previous offer of Rs 1,150 crore citing the company’s “value erosion” during insolvency proceedings.
“IDBI will not be open to any change in payment consideration (for EPC Constructions),” the lender said in a statement, noting that any change in the resolution plan would be a breach of court directions. “Resolution process has been concluded. NCLT/NCLAT have directed Royal Partner to implement the plan,” the statement said.
The lender also ruled out the possibility of reconsidering an offer from Arcelor Mittal that had emerged as the second highest bidder for the Essar group company last year. Royal Partner had outbid Arcelor Mittal at the time.
Royal Partner is seeking a discount on grounds that operations have stagnated during insolvency period as it executed no new contracts and faced huge attrition, according to a person in the know. “We cannot comment on the report at this stage as discussions are ongoing in relation to the implementation of the resolution plan,” said Mayur Ghule, managing director, RPMG Investment, Royal Partner’s parent.
The Essar group company owes an IDBI Bank-led consortium Rs 7,000 crore. EPC Constructions was once the engineering think-tank of Essar group, carrying out most of the design and fabrication for steel and power plants.
IDBI Bank is also at loggerheads with Royal Partner over the latter’s bid for C Sivasankaran’s company, Siva Industries, ET reported on August 7. The investor accused IDBI Bank of derailing the insolvency process of Siva Industries by vetoing its bid.