JSW ready to get equity partner for Essar Steel
MUMBAI: JSW Steel Ltd, which is bidding for debt-ridden Essar Steel Ltd in alliance with Numetal Mauritius, may sell some of its stake to a private equity partner if it wins the auction, a top company executive has said.
Arcelormittal and Numetal were finalists in the Essar Steel bankruptcy auction, but the bankruptcy resolution professional disqualified both bids.
The firms moved the National Company Law Tribunal (NCLT), which allowed a second round of auction, while directing that the bids not be opened until the bench decides on the case.
If the resolution plan submitted is approved by the committee of creditors, JSW Steel will invest in the step down subsidiary of Numetal.
“If the court decides lenders can go on with the second round of bidding (in Essar Steel) and Numetal becomes a successful bidder, we’ll see what can be done in the later stage, whether we bring in another investor,” Seshagiri Rao, joint managing director and group chief financial officer, JSW Steel, said in an interview.
In an earlier interaction, Rao had said JSW could not enter the bidding process as a stand- alone bidder because it did not originally offer an expression of interest (EOI).
“Considering the lenders had allowed only those firms who had submitted EOIS in the first round to bid, we had limited options. So we decided to partner with Numetal as they were willing to tie up with us,” Rao had said.
The company aims to reach a capacity of 45 million tonnes per annum (mtpa) in the next 20 years.
That would require looking at stressed assets.
“I don’t think there are any big assets in the second (RBI) list of distressed assets. Maybe there are some in the 1-1.5 mt range. We will look at these firms when they go to insolvency,” Rao added.