JSW takes lead in buying stressed steel assets

JSW Steel and Tata Steel have emerged as the most aggressive bidders for stressed assets put on the block under the Reserve Bank of India (RBI)mandated insolvency process.

While cash-rich Vedanta won the bid for Electrosteel Steels and preferred to stay away from the race for Bhushan Steel and Bhushan Power & Steel, ArcelorMittal was mired in controversy over its investment in companies that failed to repay their debt and are facing proceedings in the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC), 2016.

JSW Steel is already set to win Monnet Ispat & Energy and has emerged as the frontrunner for Bhushan Steel. It is pitted against Tata Steel to take over Bhushan Steel and Bhushan Power & Steel. The financial bids for Bhushan Power were not opened on Thursday and were sent to SBI Caps for evaluation.

The only option for stressed asset laggards now is to bid aggressively for Essar Steel, in which VTB Bank of Russia, which has tied up with the Ruias, is expected to take over a large part of the outstanding dues.

Tata Steel is the secondhighest bidder for Electrosteel, the top bidder being Anil Agarwal’s Vedanta. But both Tata and Vedanta have already written to the committee of creditors that they want to revise its offer for Electrosteel, and the committee is yet to take a call on that. According to sources close to the development, JSW Steel has offered ~300 billion for Bhushan Steel, around ~50 billion more than Tata Steel’s offer. However, lenders will give weightage to all parameters, and a final picture may emerge by the end of this week or early next week.