Moneycontrol
Last Updated : Feb 20, 2019 04:15 PM IST | Source: Moneycontrol.com

Two clarifications that point to where Essar Steel auction is headed

Separately, Vedanta and JSW Steel have said they will not put in a bid for Essar Steel

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A couple of clarifications perhaps point to the direction where the Essar Steel auction is headed.

Anil Agarwal's Vedanta on February 19 categorically confirmed that "it was not in the process to submit a revised bid for Essar Steel."

The clarification followed a report that Vedanta may team up with JSW Steel to make a last-minute bid for Essar Steel.

The second statement came from Sajjan Jindal, Chairman and Managing Director of JSW Steel. Talking to CNBC-TV18Jindal said his company will not make a fresh bid for Essar Steel.

Instead, he added, JSW Steel may team up with the Ruias if the latter's proposal to withdraw Essar Steel from the insolvency courts is accepted. JSW Steel, Jindal said, will "support with a 26 percent stake."

Both, Vedanta and JSW Steel, have been vocal about their interest in Essar Steel. The two companies were part of the second round of the auction. While Vedanta had put in a solo bid, JSW Steel had aligned with the Numetal-led consortium. The second round though was later nullified by the courts.

Their coming together looked like a final attempt to keep the insolvent company away from the grasp of ArcelorMittal, even as the ongoing hearings at the National Company Law Tribunal got over on February 19.

It remains to be seen if the Tribunal gives an order by February 28, when a hearing is scheduled at the National Company Law Appellate Tribunal.

But with the clarifications, and with the Ruias' proposal turned down by the courts, the route to Essar Steel has become clearer for ArcelorMittal and its promoter LN Mittal.

Also, Mittal has been making moves to build on his possible acquisition of Essar Steel. The steel facility in Hazira, Gujarat, depends on a port that is operated by an independent entity owned by the Ruias. A report by The Economic Times said ArcelorMittal is in talks with the Essar Group to take over the port.

ArcelorMittal is also vying for Essar-owned power plant that meets part of the power requirement of the steel facility.

That is not all. ArcelorMittal has also put in a bid for the EPC arm of the Essar Group that is also facing insolvency proceedings. The EPC firm was involved in the setting up of the Hazira facility and will be useful for ArcelorMittal, which wants to expand the steel plant's production capacity.
First Published on Feb 20, 2019 04:15 pm
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