Mumbai: Numetal Mauritius, which is contesting the rejection of its bid for Essar Steel Ltd, has offered to repay all of the debt of Odisha Slurry Pipeline Infrastructure Ltd, a crucial raw material supplier to the steelmaker, to get hold of a 70% stake from the firm’s current promoter, SREI Infrastructure Finance Ltd, a person close to the development told Mint on condition of anonymity.
The person cited above said the firm’s dues are in the region of Rs2,000 crore.
Odisha Slurry Pipeline has written to its creditors informing them about an “in principle" commitment received by it for clearing dues. The firm has agreed to settle all its outstanding dues on or before 30 April. Mint has reviewed a copy of the letter dated 28 March.
If accepted by the lenders, the deal will save Odisha Slurry Pipeline from going into insolvency. According to a Mint report dated 5 March, IDBI Bank Ltd has been looking at initiating insolvency proceedings against the firm.
Odisha Slurry Pipeline runs a 253km pipeline that is responsible for transporting about half the raw materials used by Essar Steel’s plant in Odisha.
“You are requested to confirm immediately the amount which would be due to you, as of 30 April 2018, and further confirm that immediately upon receipt of such payment, you will release all security interest over the assets of the company," the letter stated.
A Numetal spokesperson declined to comment. An email sent to an SREI spokesperson did not elicit any response.
The bankers, however, are treading with caution as the asset is closely linked to debt-ridden Essar Steel, which is currently undergoing resolution under the insolvency and bankruptcy code.
“Receiving a proposal is one thing but accepting it may be difficult. The same set of lenders have rejected Numetal’s bid for Essar Steel and accepting Numetal’s proposal for clearing the debt of Odisha Slurry Pipeline may look arbitrary," said a banker close to the development on condition of anonymity.
Numetal has challenged the disqualification of its bid for Essar Steel in the Ahmedabad bench of the National Company Law Tribunal. The firm was disqualified on account of Aurora Enterprises Ltd, controlled by a trust owned by Rewant Ruia, holding a minority stake in it. The next hearing pertaining to the matter is slated for 4 April whereas the deadline for a fresh round of bidding for the steelmaker is 2 April.