Steel Mills
ArcelorMittal Bid Rejected for Bankrupt Essar Steel
Written by Sandy Williams
March 21, 2018
Bidding for bankrupt Essar Steel is back to square one after offers from Numetal and ArcelorMittal were declared ineligible by lenders. The bids were rejected under the amended Insolvency and Bankrupcty Code that prohibits related parties and insolvency-linked parties from bidding.
ArcelorMittal India was involved in a joint venture in Uttal Gallva, which defaulted on loan repayments. The IBC prohibits a promoter of a defaulting company from bidding on stressed assets.
Numetal was rejected because its minority shareholder is the son of Essar Steel co-founder Ravia Ruia, making him a ”connected person” to Essar Steel.
The next round of bids is due by April 2. Tata Steel, Vedanta Group, SSG Capital, AION and Nippon Steel were included in the first round of bidding and will be allowed to bid again. Essar’s lenders will vote to decide if any new bidders should be allowed in the second round. JSW Steel reportedly has expressed interest.
The Press Trust of India reports that ArcelorMittal and Numetal can bid again if they “delink their connection from the promoters or standardize the loans.”
Sandy Williams
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