Rus­sian firm of­fers `37,000 cr for Es­sar Steel

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RUS­SIAN firm numetal Ltd on Thurs­day told the na­tional com­pany law ap­pel­late tri­bunal (NCLAT) that it has of­fered over Rs 37,000 crore for bank­rupt Es­sar Steel in the sec­ond-round of bid­ding, which should be opened and the high­est bid­der be se­lected tak­ing this into ac­count.

ArcelorMit­tal, the only other bid­der to have put in a bid for Es­sar Steel in the first round in Feb­ru­ary, how­ever, op­posed the open­ing of the sec­ond round of bids and wanted only the first round of bids to be con­sid­ered.

Numetal is ma­jor­ity owned by the Rus­sian state-run lender VTB Bank's pri­vate eq­uity arm VTB Cap­i­tal.

At a hear­ing of counter pe­ti­tions at the Na­tional Com­pany Law Ap­pel­late Tri­bunal (NCLAT), se­nior ad­vo­cate Mukul Ro­hatgi ap­pear­ing for NuMetal said that the sec­ond round would help to max­imise value for lenders.

“Our bid in the sec­ond round is much higher at Rs 37,000 crore. Let there be com­pe­ti­tion,’’ Ro­hatgi ar­gued. Es­sar Steel is be­ing auc­tioned af­ter the com­pany de­faulted on pay­ment of about Rs

49,000 crore loan to 30-odd banks.

Both NuMetal and ArcelorMit­tal put in a sec­ond round of bids af­ter the first bids were de­clared to be in­valid. The NuMetal bid was re­jected on ac­count of be­ing 25 per cent owned by Aurora Trust of Ruia fam­ily, the pro­mot­ers of Es­sar Steel. ArcelorMit­tal’s bid was not con­sid­ered valid as the com­pany was hold­ing shares in loan de­fault­ing com­pa­nies Ut­tam Galva Steel and KSS Petron. The in­sol­vency and bank­ruptcy law bars par­tic­i­pa­tion by pro­mot­ers of delin­quent com­pa­nies in bid­ding for as­sets be­ing auc­tioned. For the sec­ond bid­ding round, VTB Bank sought to sever ties with Ruia fam­ily by buy­ing out Aurora Trust's stake in NuMetal.

Arcelor Mit­tal says 2nd round bid should not be con­sid­ered

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