Russian firm offers `37,000 cr for Essar Steel
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