ArcelorMittal has agreed to make a bigger offer of Rs 42,000 crore for the debt-laden Essar Steel, following negotiations with lenders to the company, senior bankers have indicated to FE. So far, the offer included a Rs 35,000-crore upfront payment to lenders apart from a Rs 8,000-crore equity infusion into the company.
Crinium Bay Holdings, a member of Russia’s VTB group, has moved the Supreme Court seeking permission to bid independently or jointly with “a suitable partner” for embattled Essar Steel (ESIL). VTB, through Crinium Bay, which holds a 40% equity in Numetal, had earlier submitted the resolution plans for Essar in its capacity as a shareholder of Mauritius-based Numetal, which was later on October 4 held to be ineligible to bid by the SC.
ArcelorMittal on Friday emerged as the highest bidder for Essar Steel, the company said in a release to the Luxembourg stock exchange.
“ArcelorMittal confirms it has been informed by the committee of creditors (CoC) for Essar Steel that it has been evaluated to be the H1 resolution applicant (the preferred bidder) in the corporate insolvency resolution process for Essar Steel,” it said. The company will now enter into further negotiations with the CoC, ArcelorMittal added.
Mumbai: With the Supreme Court directing Numetal Mauritius and ArcelorMittal to settle unpaid liabilities of all connected parties to become eligible bidders for Essar Steel, a swift resolution may be out of sight for now.
The judgement has opened up several permutations depending on what course of action the stakeholders choose to follow. To begin with, both Numetal and Arcelor are weighing various legal options, including challenging the verdict.
Anil Agarwal's Vedanta group has emerged the dark horse in the race to buy Essar Steel considering that the acquisition cost of ArcelorMittal has gone up by at least Rs 70 billion when compared to other bidders and that Numetal is now almost out of the competition, say lenders.
Vedanta had offered Rs 350 billion for Essar Steel in the second round of bidding.
One of the top 12 bankrupt companies identified for immediate resolution was Essar Steel. However, its resolution process has been anything but immediate. The case is way past its 270-day timeline, even as some of the similar bankrupt steel companies have found new owners. The reason: Legal interpretation and challenges of the newly-adopted Insolvency and Bankruptcy Code (IBC).
Mumbai: The Ruias-controlled Essar Group is fighting off a challenge from a US-based hedge fund which is eyeing Essar’s assets in the UK, including the Stanlow oil refinery, to settle unpaid dues.
UK news website ITV said on Tuesday that investment firm Midtown Acquisitions LP, controlled by US-based hedge fund Davidson Kempner, is seeking a forced sale of Essar Global Fund Ltd’s (EGFL) shares in Essar Energy Ltd, which owns and runs the Stanlow refinery.
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