Chennai: Hearings on Essar Steel insolvency case are set to get over today but the tale is set to see yet another twist in the proceedings if reports are to be believed.
The seemingly unending auction race will now witness Anil Agarwal-led Vedanta make another attempt at buying Essar Steel and may potentially partner Sajjan Jindal’s JSW Steel, reports state.
The two companies may come together and put in a joint bid of about Rs 47,000 crore, said the report made by Moneycontrol.com citing a quote from an industry executive. The report however stated that the copanies are yet to take a final call on the matter.
It could be noted that last year in October, a committee of Essar Steel creditors had picked ArcelorMittal to acquire the debt-laden company for over Rs 42,000 crore.
ArcelorMittal’s resolution plan for Essar Steel, included an upfront payment of over Rs 42,000 crore to settle debt and a further Rs 8,000 crore of capital injection into the company to support operational improvement, increase production levels and deliver enhanced levels of profitability.
The Ruias, through their holding company Essar Steel Asia Holdings, had submitted a proposal of Rs 54,000 crore. But the lenders haven’t taken it up, and the courts have also turned down Ruias request.
Vedanta, which had submitted an Expression of Interest for Essar at the starting of the auction, had submitted a bid in the second round. But later, the second round was called off by the National Company Law Tribunal (NCLT).
JSW Steel has been vocal about its interest in Essar Steel and had, earlier, teamed up with Numetal to submit a bid in the second round as the Jindal company can’t put in a sole bid, despite giving such an offer to the lenders, as it hadn’t submitted an expression of interest.
Despite the possibility of this last-gap development, it remains to be seen if the lenders, and then the courts, will entertain the bid that will further delay the insolvency process that has already crossed over 570 days.
Last week, the National Company Law Appellate Tribunal had directed the NCLT to complete hearing by 19 February and give orders. The Appellate Tribunal will take up the case on 28 February, where a judgement is expected.
|Rs 4,800 crore offer|
|Essar Group has made a resolution offer of Rs 3,500 crore under one time settlement (OTS) scheme for Essar Mahan, which is a 2×600 MW coal based power plant situated in MP.
Steel giant ArcelorMittal has proposed a resolution offer of Rs 4,800 crore to lender of stressed Essar Mahan power project, over 37 per cent higher than offered by the promoter Essar Group. The total debt of the power plant is of Rs 7,500 crore.
“We had earlier received a resolution offer of Rs 3,500 crore from the developer (Essar Group) himself for Essar Mahan under OTS scheme. But, now we have received an offer from ArcelorMittal for about Rs 4,800 crore,” chairman and managing director, Power Finance Corporation, Rajeev Sharma said.