Odisha Slurry Pipeline lenders plan to stick with ArcelorMittal’s bid1 min read . Updated: 27 Jan 2020, 11:30 AM IST
- Thriveni’s upgraded offer of ₹4000 crore for the asset appears to have left the lenders unmoved
- Earlier this month, Tamil Nadu-based Thriveni Earthmovers had raised its offer for the distressed iron ore slurry pipeline to ₹4,000 crore
MUMBAI : Lenders to Odisha Slurry Pipeline Infrastructure Ltd (OSPIL) intend to stick with ArcelorMittal’s bid for the distressed asset, despite Thriveni Earthmovers’s legal challenge. Thriveni’s upgraded offer of ₹4000 crore for the asset appears to have left the lenders unmoved.
Earlier this month, Tamil Nadu-based Thriveni Earthmovers had raised its offer for the distressed iron ore slurry pipeline to ₹4,000 crore. This was higher than the offer of ₹2,200 crore by the only other bidder ArcelorMittal. Thriveni’s bid included an upfront cash payment of only ₹8 crore, while the rest of the amount was proposed to come in tranches.
When lenders rejected Thriveni’s revised bid, the latter challenged the decision at the Cuttack bench of the National Company Law Tribunal (NCLT).
“If the committee of creditors (CoC) takes a decision on the resolution plan, it is final," a member of OSPIL’s CoC told Mint on condition of anonymity. “That much has been settled by the courts. Thriveni has not made any material improvement to its bid. We don’t think the court will favour their appeal."
OSPIL owns and operates a 253-km pipeline that connects iron ore mines in Dabuna, Odisha, to a pelletisation plant in Paradip. Essar Steel, which had commissioned the pipeline, sourced about half of its iron ore needs for its plant in Hazira, Gujarat, from Dabuna.
On 15 November 2019, the Supreme Court had approved the sale of Essar Steel to a joint venture between ArcelorMittal, the world’s largest steel company by capacity, and Nippon Steel and Sumitomo for ₹42,000 crore. The steel company has since been renamed AM/NS.
“The OSPIL asset has been fully provided for by banks," the lender quoted above said. “We would like to have the maximum capital unlocked so that we can reinvest this into the lending system. The legal challenge will extend the resolution process but not materially change anything."