Essar Steel lenders meet inconclusive

CoC to discuss eligibility on Saturday

Essar Steel’s lenders meet on Wednesday remained inconclusive as lenders were unable to take a decision on the eligibility of the first round of bids by ArcelorMittal and Numetal, sources said. The CoC is expected to meet on Saturday to discuss the eligibility of both the bidders. One of the possibilities could be to give both bidders a week’s time to cure their bids. Lenders also debated on whether to go in for a fresh round of bids, and invite other players as well, a source close to the development told

Business Standard. ADVAIT RAO PALEPU, DEV CHATTERJEE & ABHIJIT LELE write

Essar Steel’s lenders met on Wednesday to decide on the eligibility of the first round bids by ArcelorMittal and Numetal but the talks remained inconclusive, sources said. The committee of creditors (CoC) is expected to meet again on Saturday. One of the possibilities could be to give both the bidders a week to cure their bids.

On Wednesday, lenders debated on whether to go in for a fresh round of bids and invite other players, a source close to the development told Business Standard. A few bankers, who attended the meeting, suggested that lenders could wait till May 17 when the National Company Law Appellate Tribunal (NCLAT) would hear petitions of both the bidders challenging the eligibility criteria.

The lenders also held meetings with representatives of ArcelorMittal, owned by L N Mittal, and Numetal, which is majority-owned by Russia’s VTB Capital, to discuss the initial offers made by both companies.

Both ArcelorMittal and Numetal made their presentations to the committee of creditors (CoC). Last week, the lenders had issued notices to both the companies providing them with a week’s time to discuss their eligibility. The offer from ArcelorMittal was believed to be around ~320 billion, while that from Numetal was lower.

ArcelorMittal, until recently, helda29 per cent share in Uttam Galva Steels and its chairman L N Mittal had a personal stake of 33 per cent in KazStroy-Service, which held a 100 per cent stake in an Indian subsidiary, KSS Petron. Uttam Galva Steels and KSS Petron have been termed as bank defaulters and weighed heavily against ArcelorMittal’s eligibility. On the other hand, Rewant Ruia, a member of the Ruia family former promoters of Essar Steel, was listed as a beneficiary of a trust, which held a 25 per cent stake in Numetal, making its bid ineligible under Section 29A of the Insolvency and Bankruptcy Code.