Essar Steel auction: Numetal’s 2nd bid valid

Source: The Hitavada      Date: 08 Sep 2018 12:58:36




THE NCLAT on Friday ruled that Numetal’s Rs 37,000 crore second-round bid for Essar Steel is valid, but asked rival bidder ArcelorMittal to clear Rs 7,000 crore dues of its previously associated firms within three days to qualify for the acquisition.

A two-member bench of NCLAT headed by its Chairman Justice S J Mukhopadhaya in a 68-page order asked lenders, who are auctioning Essar Steel to recover over Rs 49,000 crore of unpaid loans, to consider the second round bid of Numetal and mining baron Anil Agarwal-led Vedanta. ArcelorMittal’s bid will be considered if it pays dues by September 11.

For ArcelorMittal India (AMI), which was the only other bidder besides Numetal in round-1, the NCLAT held that it needs to remove the “stigma of defaulter” attached to it because of its previous 29 per cent stake in Uttam Galva Steel and KSS Petron.

The National Company Law Appellate Tribunal held that the first round of bid by Russia’s VTB Group-backed Numetal in February was ineligible as the firm was 25 per cent owned by Rewant Ruia, scion of Essar Steel’s promoter Ruia family. But, he exited the firm before second round of bid was submitted in March, making Numetal eligible.

NuMetal and steel tycoon Lakshmi Mittal-led ArcelorMittal had in February submitted separate bids to takeover of Essar Steel. The Committee of Creditors (CoC), however, disqualified both bids saying their promoters were tied to companies, which were bank loan defaulters and so ineligible under Section 29A of the Insolvency and Bankruptcy Code.

The second round of bids was called where JSW Steel joined NuMetal to put in a bid of Rs 37,000 crore, while Vedanta entered fray as a third bidder. AMI too put in a bid.