ArcelorMittal SA, Vedanta Resources and a group comprising Russia’s VTB and top Indian steelmaker JSW Steel have bid for bankrupt steelmaker Essar Steel India, Reuters reported quoting a joint statement of the companies.
Essar Steel is among a dozen of India’s biggest debt defaulters that were pushed into the bankruptcy court last year after a central bank order aimed at clearing record bad loans at the country’s banks.
A previous round of bids for Essar Steel, which faces nearly $8 billion in claims from its creditors, has attracted interest from ArcelorMittal and a VTB-led group. But a court-appointed administrator scrapped that round saying neither of the bidders was eligible to bid for the asset due to their links with loan-defaulting companies.
ArcelorMittal, which has long been trying to get a foothold in the booming Indian market with its own steel plant, said its India unit had submitted a bid for Essar Steel in a joint venture with Nippon Steel & Sumitomo Metal Corp.
ArcelorMittal earlier sold its stake in another Indian company Uttam Galva Steels Ltd – which has defaulted on bank loans – to clear the way for a bid for Essar Steel. India’s bankruptcy laws bar a company with any connection to a loan defaulter bidding for assets being auctioned under the bankruptcy process.
NuMetal, a company led by Russia’s VTB, which has also submitted bids for Essar Steel, has partnered JSW Steel in the latest round, according to a statement from the Indian steelmaker.
JSW Steel’s Joint Managing Director Seshagiri Rao told Reuters it had agreed to partner NuMetal after being approached by the company.
Anil Agarwal, the billionaire chief of London-headquartered Vedanta, said that they had put in a bid for Essar Steel.
The group’s India-listed Vedanta Ltd last week was successful in an auction to buy another bankrupt steelmaker Electro Steels. (Prime/Ukrainian metal)