DISCOUNT OR DELAY
THE SALE PROCESS of Essar Steel under the insolvency law may face either of two eventualities
- sale at discount or inordinate delay. The Supreme Court recently asked two lead bidders, Numetal consortium and ArcelorMittal to pay off their dues to qualify for Essar bidding.
Numetal will have to pay the entire debt of Essar Steel (around ` 49,000 crore) to qualify for the bid since Essar’s defaulter promoter Rewant Ruia was one of its stake holders. The cost for ArcelorMittal would be
` 7,000 crore. If both the bidders don’t find any merit in such a bid, they will back out, leaving Vedanta alone in the fray. It will reduce the sale value.
Inviting fresh bids will be another option. JSW Steel and VTB group (promoter of Numetal) are exploring opportunities to go solo in bidding.
Aerial view of Essar Steel plant