SAIL plans to bid for stressed assets of Essar, Bhushan

The country’s largest steelmaker, Steel Authority of India Ltd (SAIL), is considering bidding for the stressed assets of Essar Steel and Bhushan Steel that are facing insolvency proceedings.

According to sources, “A team of SAIL visited the units of Essar Steel and Bhushan Steel almost 20 days back to assess how these are and to evaluate whether to bid (for) the units or not”. Essar Steel was among the initial 12 companies identified by the Reserve Bank of India (RBI) for insolvency proceedings.

“Since we (both Essar and SAIL) are in the same sector, we are keeping our options open for buying stressed assets,” a SAIL official said. Bhushan Steel’s Chief Financial Officer, Nittin Johari, said, “I have nothing to say. There is a process going on and thus I can’t comment on it.”

Essar Steel could not be reached for comment. It owes about ~45,000 crore to lenders.

Essar Group had earlier submitted an Expression of Interest for Essar Steel and said it would send a resolution plan to the Insolvency Resolution Professional within the scheduled time frame.

The government last month promulgated an ordinance to bar wilful bank loan defaultersm as well as those with non-performing asset accounts, from bidding in auctions to recover loans under the insolvency process.

The ordinance comes as a blow to defaulting promoters seeking to reclaim firms under insolvency proceedings, aims at putting in place safeguards to prevent unscrupulous persons from misusing or vitiating the provisions of the Insolvency and Bankruptcy Code, the corporate affairs ministry had said earlier.