ArcelorMittal and Numetal bids ineligible: Essar Steel’s lenders
NEWDELHI: Lenders to Essar Steel Ltd decided to reopen bidding for the debt-ridden steelmaker after declaring ArcelorMittal and Numetal Mauritius Ltd ineligible, two people aware of the matter said.
The bidding will be open to all six companies that had submitted expressions of interest in Essar in the first round of bidding, the people said, requesting anonymity. The committee of creditors, which is overseeing the sale of Essar Steel, took the decision in a meeting on Wednesday.
ArcelorMittal and Numetal can also bid, provided they take “corrective action”, the people said. The tentative deadline for submitting fresh bids is April 2.
On Wednesday, Essar’s committee of creditors cited section 29 (a) of the insolvency and bankruptcy code to reject ArcelorMittal’s and Numetal’s bids. The clause bars wilful defaulters, entities whose dues had been classified as non-performing assets for more than a year and all related entities of these firms from participating in the resolution process. The defaulters can become eligible for bidding if they pay up their dues.
ArcelorMittal’s bid was rejected because the firm had a stake in Uttam Galva Steels Ltd, a delinquent borrower.
“ArcelorMittal has sold its stake in Uttam Galva Steels but the firm’s exit needs to reflect in the official documents filed with the Securities and Exchange Board of India as well, which has not happened so far. Moreover, in the previous round of bidding, ArcelorMittal was still holding stake in Uttam Galva, which made it ineligible as well,” said one of the people cited earlier.
An ArcelorMittal spokesperson declined to comment, saying that the company has not received any communication from the resolution professional.
In Numetal’s case, one of its minority shareholders, Aurora Trust, has Rewant Ruia, son of Essar Group co-founder Ravi Ruia, as a beneficiary. The person cited earlier said that lenders have suggested that the Ruia-connected entity exit its holding in Numetal to become eligible for the next round of bidding.