From March 2018 Essar Steel, with its production capacity of 10 million tonnes per year, had an outstanding debt of ₹ 50,786 crore. Photo: AP
Mumbai: ArcelorMittal, the world's largest steel producer, has revised its bid to buy Essar Steel with debts for ₹ 42,000 crore, according to a person who is aware of the development that Mint talked to. The company also pledged to pay £ 700 for the payment of Uttam Galva and KSS Petron's rights, in which the steel producer based in Luxembourg is classified as promoter.
In a press statement, ArcelorMittal confirms that it has submitted a revised proposal to the Essar Steel creditors' committee for the acquisition. "The financial terms of the proposal are confidential but represent a material increase over the Company's previous offers The revised offer, which includes an obligation to pay the full amount due to the financial creditors of Uttam Galva and KSS Petronorn, therefore, represents an unprecedented value for all creditors involved, "said the statement.
"With the revised offer, ArcelorMittal shows its serious commitment to India, creditor banks and all Essar Steel stakeholders."
From March 2018 Essar Steel, with its production capacity of 10 million tonnes per year, had an outstanding debt of ₹ 50,786 crore. In the second round of bids, Numetal said it would pay ₹ 37,000 crore to buy out Essar Steel, while Vedanta, the other bidder, offered ₹ 34,000 crore.
In a ruling on Friday, the National Court of Appeal for Business had ruled that ArcelorMittal would not be eligible to bid on Essar Steel unless it had also made good the debts at Uttam Galva and KSS Petron, a requirement under article 29A of the Insolvency and Bankruptcy Act. Numetal was also initially ineligible, but then changed its fixed structure to fall into line with rules.
In this second round of offers, ArcelorMittal joined forces with Nippon Steel and Sumitomo Metal Corporation, while JSW Steel from Sajjan Jindal is a stakeholder in NuMetal & Steel Pvt Ltd, a drop-down subsidiary of the Nuts Mauritius, led by VTB Bank, resolution applicant for Essar Steel.
The creditors' committee is now expected to make a call on which bidder they deem the most suitable. On Friday, the NCLAT, in its judgment, had allowed the lenders to continue negotiating offers for Essar Steel in order to maximize the value.