WILL BE SURPRISED IF ARCELORMITTAL IS INELIGIBLE FOR ESSAR STEEL BID: LN MITTAL
Steel tycoon L N Mittal has said he would be surprised if ArcelorMittal, the world's largest steelmaker, is declared ineligible to participate in the bid for Essar Steel. ArcelorMittal and Numetal are the two bidders in the race to acquire debt-laden Essar Steel, currently undergoing insolvency proceedings as it owes more than Rs 45,000 crore to over 30 banks. "Ultimately, I would be surprised if we are not eligible to participate in the bid for Essar Steel. ArcelorMIttal is the world's leading steel company – we are financially strong, we are ready to invest and bring our technology and products and processes to India," Lakshmi N Mittal, Chairman and CEO, ArcelorMittal has told PTI Economic Service. The Committee of Creditors (CoC) on May 2 had met representatives of ArcelorMittal and Numetal regarding their eligibility for Essar Steel and a decision is awaited. Mittal, who has been trying to get a foothold in India for over a decade, has said: "India is important to us. Of course for me personally I would like us to have a presence in my home country". But moreover, he said, "India is a strategic growth market and if you look at steel industry growth then the majority of growth in the coming years is going to come from the developing economies ex China and that includes India". He said under present circumstances there is a strong strategic rationale for the company to establish a presence in India. Asked whether they would be open to organic, inorganic growth in India, Mittal in an e-mailed interview said: "At the moment we are focussed on Essar".
ArcelorMittal last week had said "a swift decision" on the case will be in the best interest of all stakeholders. Unable to register its presence in India for more than a decade, ArcelorMittal is eyeing entry in the Indian steel market, which it believes has high growth potential, through Essar acquisition. It has said ArcelorMittal would be the most credible owner of Essar Steel and the company viewed the acquisition as a compelling opportunity for it to enter the Indian steel market. The company has plans to increase Essar's output in long term to 15-20 million tonne per annum (MTPA) from the current 6 MTPA. The steel firm also said if its bid is successful it would help India bridge its supply-demand gap and make a significant contribution to the Make-in-India initiative. ArcelorMittal had bid for Essar Steel on February 12. The company has been trying for long to enter India but has not succeeded so far. Over a decade back, it had announced to set up two plants - 12 MTPA each- in Jharkhand and Odisha. ArcelorMittal has presence in 60 countries and an industrial footprint in 18 countries. It is a leading supplier of steel in major global markets. In 2017, ArcelorMittal had revenues of USD 68.7 billion and crude steel production of 93.1 MT, while its own iron ore production reached 57.4 MT. It is listed on stock exchanges of New York, Amsterdam, Paris, Luxembourg and Spain. Meanwhile Essar Steel lenders have moved the National Company Law Appellate Tribunal seeking an early hearing of appeals filed by suitors for the insolvency-bound firm, saying they are losing a lot of money because of the delays. The NCLAT had on May 22 ordered status quo on insolvency of Essar Steel for two months as it admitted petitions of NuMetal and ArcelorMittal over the bidding eligibility. State Bank of India (SBI) had filed the petition in the NCLAT on behalf of the Committee of Creditors (CoC) of Essar Steel seeking the "earliest possible date for hearing on a day to day basis." The NCLAT had on May 22 ordered hearing on the appeals on a daily basis from July 23-26. SBI has said the corporate insolvency resolution process of Essar Steel commenced on August 2 and since then the operations of the company are being sustained and largely funded by the CoC. On top of the Rs 52,569 crore admitted outstanding debt, an interest of Rs 5,100 crore has accrued on the loans and advances since the insolvency commencement date, it has said. Russia's VTB Capital-based NuMetal and ArcelorMittal are vying for Essar Steel, which operates a 10 million tonnes a year steel plant with about 11,000 employees. NuMetal and ArcelorMittal have filed petitions in the NCLAT challenging the disqualification of their first round of bids. Both NuMetal and ArcelorMittal put in the second round of bids after the first bids were opined to be invalid -- NuMetal because of it being 25 per cent owned by Aurora Trust of Ruia family, the promoters of Essar Steel; and ArcelorMittal because of it 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 round of bid, VTB Bank sought to sever ties with the Ruia family by buying out Aurora Trust's stake in NuMetal. ArcelorMittal transferred Rs 7,000 crore to an escrow account of SBI to clear outstanding loans of Uttam Galva and KSS Petron.
Lakshmi N Mittal, Chairman and CEO, ArcelorMittal