Mumbai: ArcelorMittal SA, the world’s largest steel maker, on Monday sharply raised its bid to acquire debt-laden Essar Steel Ltd to 42,000, said a person with direct knowledge of the matter.

The National Company Law Appellate Tribunal in its judgement last Friday asked ArcelorMittal to first clear dues totaling 7,000 crore of Uttam Galva Steels Ltd and KSS Petron Pvt. Ltd by 11 September to be considered an eligible bidder for Essar Steel. The company had earlier offered 30,500 crore for Essar Steel.

ArcelorMittal has also committed to pay 7,000 crore to settle the dues of Uttam Galva and KSS Petron, in which the Luxembourg-based steel producer is classified as promoter.

It could not be ascertained whether ArcelorMittal has paid the dues to the relevant lenders.

In a statement, ArcelorMittal confirmed that it has submitted a revised proposal to Essar Steel India Ltd’s (ESIL) Committee of Creditors for the acquisition of ESIL.

“The financial terms of the proposal are confidential, but represent a material increase to the previous offers made by the company," the company said. It said “the revised offer, which includes a commitment to pay the entire amount due to the financial creditors of Uttam Galva Steels Ltd and KSS Petron, therefore represents unprecedented value to all concerned creditors."

“Through the revised offer, ArcelorMittal demonstrates its serious commitment to India, creditor banks and all ESIL’s stakeholders," the steel maker said.

As of March 2017, Essar Steel—with its 10 million tonne a year production capacity—had a debt outstanding of 50,786 crore.

In the second round of bids, Numetal said it would pay 37,000 crore to buy out ESIL, while Vedanta Resources, the other bidder, had offered 34,000 crore.

In a ruling on Friday, the NCLAT had ruled that ArcelorMittal would be ineligible to bid for Essar Steel unless it cleared the debts at Uttam Galva and KSS Petron as well, a requirement under Section 29A of the Insolvency and Bankruptcy Code. Numetal had also been found ineligible initially, but then altered its firm structure to comply with the rules.

In the second round of bids, ArcelorMittal has teamed up with Nippon Steel and Sumitomo Metal Corp. Sajjan Jindal’s JSW Steel is a stakeholder in Numetal & Steel Pvt. Ltd, a drop down subsidiary of Russia’s VTB Bank-led Numetal Mauritius, which is the resolution applicant for Essar Steel.

The committee of creditors is now expected to decide on which bidder they find most suitable. On Friday, the NCLAT in its judgment permitted the lenders to further negotiate bids for Essar Steel in order to maximise value.

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