ArcelorMittal, Numetal bids for Essar Steel rejected

Essar Steel insolvency saga rolls

Essar Steel insolvency saga rolls

Also this was in view of various news reports suggesting that the Resolution Professional of Essar Steel has been advised that Numetal is not eligible to submit a Resolution Plan, and that the CoC would meet on Wednesday, March 21, 2018 to consider the recommendation of the Resolution Professional in this regard, it further added.

The consortium of lenders to Essar Steel led by State Bank of India on Wednesday rejected the bids by Numetal and ArcelorMittal for being ineligible under the amended Insolvency & Bakruptcy Code that debars related parties from bidding.

Arcelor and Numetal can now submit fresh bids for Essar Steel, which has an annual capacity of 10 million tonnes. The Mittals have also reportedly offered to pay 50 per cent of dues to lenders so that they becomes eligible to bid, something the new Section 29 A allows. It partnered Nippon Steel & Sumitomo Metal Corp to bid for Essar Steel but the company's earlier stake in debt-laden Uttam Galva proved to be a spoiler. ArcelorMittal was involved with Uttam Galva when it was declared a defaulter.

Numetal's 25% shareholder Rewant Ruia is the son of Essar Steel co-founder Ravi Ruia, and thus he can be defined as a "connected person" under the IBC clause that prevents promoters of defaulting companies from bidding.

JSW Steel is yet to taste success in the ongoing asset-sale process and will join the race for Essar on its own or through a tie-up with PEs that had expressed interest earlier.

The bids were evaluated by resolution professional Satish Kumar Gupta, along with risk advisory Grant Thornton and law firm Cyril Amarchand Mangaldas.

Numetal said it apprehends that "full facts submitted by Numetal for determination of its eligibility to submit a Resolution Plan have not been appropriately assessed". "Accordingly, all necessary facts for determining the eligibility of Numetal have been placed before the NCLT for an objective assessment", it said.

"The Hon'ble NCLT, on hearing the counsel appearing for Numetal, issued a notice to the Committee of Creditors (COC) through the Resolution Professional. The next date of hearing of the application is April 4, 2018, as per the attendance-cum-order sheet of the hearing of Ahmedabad Bench of NCLT", Numetal said.

Essar Steel owes close to Rs 45,000 crore to the lenders and the 270-day time limit for a resolution under the IBC ends on April 29.

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