ArcelorMittal submits bid for Essar Steel

ArcelorMittal on Monday evening announced that its subsidiary ArcelorMittal India Private Limited (AMIPL) has submitted an offer for Essar Steel.

Bids for Essar Steel were to be submitted by 5pm on Monday.

Founded by Shashi and Ravi Ruia, Essar Steel was referred to the National Company Law Tribunal last year after accumulating nearly Rs 50,000 crore in debts.

“Essar provides a compelling opportunity for ArcelorMittal to enter the high growth Indian steel market," said Lakshmi Mittal, Chairman and CEO.

"The offer submitted today by AMIPL includes a detailed investment plan to address operational issues in Essar’s existing asset base.  With our industry expertise and renowned operating prowess, we believe we are uniquely equipped to implement a successful turnaround which would be beneficial to Essar’s stakeholders," Mittal said in a statement.

His son and Group CFO and CEO, Aditya Mittal, added that “This opportunity aligns with the group’s strategy of selectively investing in attractive projects to maximize long-term shareholder value.  India is expected to be the world’s fastest growing economy over the next decade and as the economy grows its steel intensity will also increase."

Essar is the first company that ArcelorMittal has bid for, even though it had shown interest in others such as Bhushan Steel and Bhushan Power & Steel, which are also being auctioned.

Apart from ArcelorMittal, Tata Steel and Numetal Mauritius are also expected to put in their bids. Numetal is a special purpose vehicle in which the Ruias and Russian bank VTB are shareholders.

With Essar Steel being the last of the prized assets that are being put under the hammer, industry watchers expect the bids to be aggressive. While the liquidation value of Essar Steel has been pegged at Rs 20,000 crore, reports say that bids might be has high as Rs 40,000 crore.