Mumbai: Sajjan Jindal, chairman and managing director of JSW Group, on Monday said his company was not allowed to place a bid for Essar Steel Ltd as the lenders did not want to re-open bids and give out “advertisements in the newspapers".
“In their discretion, they thought they do not want to give a new entrant a chance. If they do not want more money then it is up to them," Jindal said.
On Wednesday, lenders to Essar Steel decided to re-open bidding for the debt-ridden steel maker after declaring ArcelorMittal and Numetal Mauritius Ltd ineligible. However, they decided to restrict this to the six firms that had submitted expressions of interest.
“In this case (Essar Steel), we wanted to re-enter and wanted to give a very good competition... and the creditors would have got more money if we were involved. Then they (CoC) felt that if we were given an opportunity, they would have to advertise in newspapers and will have to call for bids again. People may ask for the data room to be opened. So, we gave in writing to the CoC that we do not need any time. We are willing to participate (on an) as-is basis and with whatever information we have. In their thought process, discretion, they thought they do not want to give a new entrant a chance," he added.
Jindal said his company did not bid for Essar Steel in the beginning because it was in the race to buy Bhushan Steel, which it identified as a “prime asset". JSW lost out to Tata Steel, which is said to have quoted a higher valuation. The Bombay House company now needs approval from India’s competition watchdog and National Company Law Tribunal.
Jindal on Monday also reacted strongly against lobbying being done in the favour of an amendment in the insolvency and bankruptcy code to allow bankrupt promoters to bid for the assets.
“Somebody who is a promoter and has defaulted should not participate in the IBC process. Now, I am told that there have been instances where promoters have sold their stock, just to be eligible to participate and fulfil the obligations that he is no more a promoter. In the spirit of law, it is not fair. I will be very surprised if that kind of a thing will be permitted in this country," Jindal said.
Separately, JSW Steel’s US unit is planning to invest up to $500 million in Texas to expand its steelmaking operations. The firm wants to use the funds for backward integration, to create the first melt, and manufacture contiguous plate and pipe facility.
The investment by JSW USA will be used to spruce up capabilities of its facility plate and pipe mill in Baytown, Texas in which the company has already started to invest $150 million. The rest will be spent to set up a hot-end facility to melt and manufacture steel.