The 10-year-term loan would be used to refinance their acquisition of Essar Steel India, now known as ArcelorMittal Nippon Steel India Ltd.
This is likely a reissue of an earlier tender by the company in November last year for the same volumes and delivery period, a second source said, though this could not immediately be confirmed.
A major focus area for the two partners would be research and development. ArcelorMittal invests $300 million a year into R&D, and its partner has put in about $2 billion in last three years in research and innovation.
India's largest bank stands out because of its sheer size and better operating performance among PSBs
According to a release, the company has also established a joint venture with Nippon Steel called ArcelorMittal Nippon Steel India (AM/NS India), which will own and operate Essar Steel.
"For MSMEs, I think the Insolvency and Bankruptcy Code (IBC) is not the right route. It is more for the bigger corporates. MSMEs should have a rehabilitation...we are not in favour to take them to the NCLT because it will burden the system unnecessarily," Kumar said.
As per a source privy to the development, ArcelorMittal has arranged the entire fund and is likely to transfer the amount by December 16.
ArcelorMittal India Private Limited's (AMIPL) resolution plan for Essar Steel India Limited (‘ESIL') has been unconditionally approved by the Supreme Court of India and the approval of AMIPL's resolution plan is the final procedural step in ESIL's corporate insolvency process, the company said in a statement.
The NCLAT’s order had upset the premier position of financial creditors in the resolution process. The SC has restored their position
Jerome Anthony gets in conversation with Nilang Desai, Partner at law firm AZB & Partners and Deputy Editor (Deals) Ashwin Mohan, who decode the fine print of the SC verdict in the Essar Steel case.
Essar Steel is a feather in ArcelorMittal’s cap but it has its task cut out and its balance sheet will feel the strain of the acquisition
Banking wrap: Union Bank of India sees credit pick up in H2, pares credit growth target to 7-9%; Indian banks add bad loans of Rs 1 lakh crore in H1FY20 and more
The Supreme Court on Friday set aside an NCLAT order which gave equal rights to the secured and unsecured creditors during the insolvency proceedings of debt-ridden Essar Steel, clearing the decks for its takeover by Lakshmi Mittal-led ArcelorMittal.
Moneycontrol's Jerome Anthony talks to Corporate Bureau Chief Prince Thomas to find out the top developments in the corporate world.
Moneycontrol's Shraddha Sharma talks to Prince Thomas to understand the SC judgement
The Indian steel market, despite its recent sluggishness, is among the fastest growing in the world. India, which overtook Japan last year as the world's second largest steel producer, now produces 106 million tonnes of steel, second only to China's 928 million tonnes.
Lenders have been grappling under the burden of aging provisions due to prolonged delay in the resolution of non-performing assets under the Insolvency and Bankruptcy Code.
The rating agency said cases in the IBC have taken much longer to resolve than the originally envisaged 270 days, in large part because concerned parties have repeatedly appealed to higher courts.
While lenders are gearing up to challenge NCLAT's ruling in Supreme Court, there is hope that amendments will be made in the IBC law to ensure faster resolutions in future.
The tribunal observed that the NCLAT order has changed the entire outcome for all stakeholders and is like a formula with clear-cut directions on the distribution of the proceeds should be carried out.
Under the new resolution plan, banks will have to take a haircut of around 40 percent
Essar Steel is undergoing insolvency proceedings.
ArcelorMittal had previously submitted a non-binding offer of Rs 4,800 crore for the same asset.
A two-member bench headed by Chairman Justice S J Mukhopadhaya asked all parties, including ArcelorMittal, to file their written submissions over their submissions by May 22.