ArcelorMittal sweetens bid for Essar Steel with more equity1 min read . Updated: 23 Oct 2018, 09:02 PM IST
ArcelorMittal is offering an additional equity infusion of ₹8,000 crore over and above the ₹42,000 crore it promises to pay for acquiring Essar Steel
Mumbai: Lakshmi Mittal-controlled ArcelorMittal on Tuesday sweetened its bid for Essar Steel by offering an additional equity infusion of ₹ 8,000 crore over and above the ₹ 42,000 crore it promises to pay for acquiring the bankrupt steelmaker, said a banker on the committee of creditors of Essar Steel.
The move raises ArcelorMittal’s total bid for Essar Steel to ₹ 50,000 crore.
On Friday, Essar Steel’s committee of creditors declared ArcelorMittal the H1 bidder for the bankrupt steelmaker. Presentations were made by ArcelorMittal and Vedanta of their respective resolution plans. ArcelorMittal had placed an offer of ₹ 35,000 crore plus ₹ 8,000 crore of equity infusion on the table while Vedanta could only place an equity infusion offer of ₹ 5,000 crore.
The CoC has begun the voting process on the two bids. The results are expected to be announced on Wednesday. At least 66% of lenders have to approve of a single plan for it to be accepted at the NCLT.
Last week, creditors declared Numetal Mauritius ineligible to bid for the beleaguered steel firm as it had not paid its dues before the 19 October deadline set by the Supreme Court in its Essar Steel judgement. However, Russia’s VTB Bank, and the largest stakeholder in the Numetal Mauritius consortium, has appealed to the Supreme Court seeking permission to make a solo bid or with a new technical partner.
ArcelorMittal has settled its ₹ 7,469 crore outstanding dues in Uttam Galva Steels and KSS Petron, two companies in which Mittal is a promoter, clearing the eligibility barrier to bid for Essar Steel. Under Section 29A of the Insolvency and Bankruptcy Code (IBC), bidders cannot be connected to other defaulting entities. Essar Steel has accumulated debt of over ₹ 49,000 crore.