ArcelorMittal SA, which is a leading Luxembourg-based steelmaker, has recently increased its initial bid amount to acquire Essar Steel to a total of Rs.42,000 crore. The National Company Law Appellate Tribunal (NCLAT) has, however, asked the steelmaker to first pay off prior dues of Rs.7,000 crore to KSS Petron Pvt. Ltd. and Uttam Galva Steels Ltd., given that ArcelorMittal SA is a promoter of these companies, in order to be considered as a prospective bidder for Essar Steel.
ArcelorMittal SA had previously made a bid of Rs.30,500 crore to acquire Essar Steel. The company confirmed in a recent statement that it has made and submitted a revised proposal to the Committee of Creditors of Essar Steel India. The company also said that the revised offer includes a commitment on part of ArcelorMittal to pay off dues to the creditors of KSS Petron and Uttam Galva Steels Ltd. The Luxembourg-based steel manufacturer added that with the revised offer, the company will be demonstrating its commitment to ESIL’s stakeholders, creditor banks, and India.
Essar Steel, as of March 2017, has an outstanding debt to the tune of Rs.50,786 crore. In the second bidding round to acquire Essar Steel, Vedanta Resources made a bid offer of Rs.34,000 crore, while Numetal made a bid of Rs.37,000 crore. ArcelorMittal SA had partnered with Sumitomo Metal Corp. and Nippon Steel for the second round of bidding. ESIL’s committee of creditors is expected to now choose a suitable bidder.
Sources: The Times of India, Livemint