The insolvency professional appointed for Bhushan Steel has deferred the decision to open the financial bid placed by JSW Steel, Tata Steel and group of Bhushan Steel employees on Tuesday.

The resolution professional was asking the bidder companies to explain their resolution plan and the reasons on why they think the plan will succeed, said sources.

JSW Steel was also asked to explain the logic behind tying up with Ajay Piramal-owned Piramal Enterprises for acquiring Bhushan Steel. The bids placed by a group of 500 employees of Bhushan Steel may be rejected as they have not placed the bank guarantee, said another source privy to the development.

JSW Steel has agreed to repay ₹28,000 crore debt while Tata Steel has placed bids of ₹24,000 crore, he added.

Meanwhile, market sources said Luxemburg-headquartered metal major ArcelorMittal will sell its 29 per cent stake in bankrupt UttamGalva Steel at a loss to make it eligible for Bhushan Steel bidding.

Currently, the Insolvency and Bankruptcy Code does not allow promoters of defaulting companies to bid for stressed asset.

Sainath Trading Company, a group entity UttamGalva Steel promoted by the Miglani family, will buy 4,13,27,931 shares, representing the entire block of shares owned by ArcelorMittal Netherlands BV at an average of ₹24 a share through an inter-se transfer of shares among promoters, said sources.

The block trade is expected to happen by end of this week and thereafter Miglani family will own the entire 60.87 per cent stake, with public shareholders owning the rest, he added.

Billionaire Lakshmi Mittal-promoted ArcelorMittal, which had tried unsuccessfully to set up manufacturing facility in India, is also keen on bidding for stressed Essar Steel asset.

Bhushan Steel has a steelmaking capacity of 5.6 million tonnes while Essar Steel has a capacity of 10 million tonnes. Bhushan Steel has debt of ₹44,478 crore while Essar Steel debt stands at ₹37,284 crore.

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