Moneycontrol
Last Updated : Sep 10, 2018 10:15 PM IST | Source: Moneycontrol.com

ArcelorMittal submits revised bid of Rs 42,000 crore for Essar Steel; moves SC against NCLAT order

Sources said the Rs 42,000-crore offer doesn't include the Rs 7,000 crore ArcelorMittal has to pay to clear dues of Uttam Galva Steels and KSS Petron.

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Upping its stake in the race for Essar Steel, ArcelorMittal has submitted a revised bid of Rs 42,000 crore for the stressed steel company.

This trumps Numetal's bid of Rs 37,000 crore.

The announcement comes even as Essar Steel's lenders were meeting in  Mumbai, a few hours after the resolution professional opened the second round bids on Monday morning.

"The financial terms of the proposal are confidential, but represent a material increase to the previous offers made by the company," ArcelorMittal said in a statement.

Sources added that the Rs 42,000-crore offer doesn't include the Rs 7,000 crore ArcelorMittal has to pay to clear dues of Uttam Galva Steels and KSS Petron.

ArcelorMittal has also moved the Supreme Court against the NCLAT order, which had asked it to clear these dues to be eligible.

“The thinking of the company is that the NCLAT order is flawed as it allows Numetal to bid after changing its shareholding. But even though ArcelorMittal has sold its shares in defaulting companies, still that is not enough,” said an executive.

Last week, the NCLAT had asked ArcelorMittal to clear the dues by September 11 to be eligible to bid. The condition was necessary to clear Clause 29A of Insolvency and Bankruptcy Code, barring promoters of defaulting companies from bidding for stressed assets.

ArcelorMittal was a promoter in Uttam Galva Steels and KSS Petron, before selling the stakes.

"The revised offer, which includes a commitment to pay the entire amount due to the financial creditors of Uttam Galva and KSS Petron, therefore represents unprecedented value to all concerned creditors," the company added.

ArcelorMittal’s application may be mentioned by the Supreme Court on Tuesday for an urgent hearing.

Apart from Numetal and ArcelorMittal, Vedanta Resources has also submitted a bid in the second round.

Essar Steel had accumulated dues of Rs 49,000 crore.

Confusing

ArcelorMittal's offer, while making the race for Essar Steel intense, has also confused observers.

"The NCLAT had asked the company to clear dues by September 11. But ArcelorMittal, till now, hasn't done that. It has only reiterated its commitment to clear the dues. Clearly, according to the NCLAT order, that is not enough," said an executive from the industry.

Sources added that the world's largest steelmaker, in its offer to Essar Steel lenders, has also underlined that it "reserves" the right to challenge NCLAT's order in Supreme Court.

"With a higher offer than Numetal's, ArcelorMittal may be trying to exclusively negotiate with Essar Steel's lenders to ensure that the Rs 7,000 crore that it has to pay to clear dues, is not for nothing," added another executive.

 
First Published on Sep 10, 2018 04:50 pm
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