Advantage ArcelorMittal as Numetal Mauritius may not bid for Essar Steel
Numetal Mauritius will not be able to settle outstanding dues of associated companies even as ArcelorMittal paid $1 billion to satisfy the eligibility criteria for Essar Steel bidding
Mumbai: Numetal Mauritius will not be able to settle outstanding dues of associated companies even as ArcelorMittal paid ₹7,469 crore on Wednesday to satisfy the eligibility requirement for bidding for Essar Steel Ltd, said three people aware of the development. This follows the Supreme Court’s two-week deadline for the two companies to settle the dues passing.
A spokesperson for Numetal Mauritius declined to comment on whether the consortium had settled the outstanding dues. But a person directly aware of the development said the consortium has decided against going ahead with the payment, amounting to at least ₹49,000 crore.
Numetal’s plan has narrowed the race for Essar Steel to only two bidders—ArcelorMittal and Vedanta Resources Plc.
However, on 8 October, VTB Bank of Russia, which is a majority shareholder in the Numetal Mauritius consortium, approached the apex court seeking permission to submit a solo bid.
“Prima facie, it appears that Numetal will not be eligible to bid for Essar Steel. While (according to publicly available information) VTB has petitioned at the apex court to bid solo for the asset, it will have to undergo fresh scrutiny under Section 29A of the IBC (Insolvency and Bankruptcy Code) and the outcome will depend on the decision by the Supreme Court, committee of creditors and the resolution profession,” said Siddharth Srivastava, partner, Restructuring and Insolvency, Link Legal.
Section 29A of the IBC bars promoters of non-performing assets and their relatives from bidding for the same assets through different channels.
“Numetal Mauritius could have approached the Supreme Court seeking extension of the deadline for repayment of dues but since it hasn’t done so yet, it is unlikely that such a plea will be entertained now,” Srivastava said.
ArcelorMittal will submit the proof of payment to the creditors of Essar Steel on Friday. The CoC is also scheduled to meet on Friday to discuss the status of the resolution process.
In the most recent round of bidding, ArcelorMittal submitted a bid of ₹42,000 crore for Essar Steel, Numetal Mauritius offered ₹37,000 crore and Vedanta placed a bid of ₹35,000 crore.
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