Arcelor Mittal’s bid for Essar Steel assets wins lenders’ approval

The committee of creditors of debt-laden Essar Steel India Ltd has chosen ArcelorMittal SA and Japan’s Nippon Steel & Sumitomo Metal Corp. as the winning bidders for the asset, Nippon Steel said in a statement on Friday.

The two companies would pay a total of $5.7 billion to buy Essar Steel, a Nippon Steel spokesman said. ArcelorMittal would own a majority stake, and Nippon Steel would own a nearly equal stake, he added. “The acquisition will be implemented subject to the approvals of National Company Law Tribunal and other relevant authorities,” the Nippon Steel statement said.

The announcement potentially brings to a close a yearlong tussle for one of the most attractive assets under the new insolvency process in India.

Essar Steel drew interest from steelmakers such as JSW Steel and Vedanta Ltd and international firms and banks such as Russia’s VTB and ArcelorMittal.

The news comes just a day after founders of Essar Steel came in with a surprise offer to pay ₹54,389 crore ($7.4 billion) to creditors to settle claims, and allow the company to exit the bankruptcy process.

Essar’s founders—the Ruia family—have tried to hold on to the steel asset, first through a minority stake in VTB-led consortium Numetal which bid for Essar Steel, and later as a lastditch effort on Thursday through an independent offer.

The tussle between Numetal and ArcelorMittal went all the way to India’s Supreme Court, which this month ruled that any bidders would have to settle all pending dues tied to any distressed assets they were associated with before they could bid for the steel plant.

ArcelorMittal announced last week that it had cleared the dues of Uttam Galva and KSS Petron, two other smaller defaulters that it was previously associated with.