ArcelorMittal is exploring a joint offer with Resurgent Power Ventures Pte to buy an Essar Power generation plant, according to people with knowledge of the matter.

The companies have held preliminary talks on a potential joint bid for the 1,200-megawatt power plant in Madhya Pradesh, sources said. Arcelor had previously made a non-binding offer of ₹4,800 crore ($690 million) for the asset, Bloomberg News reported in February.

Related news:ArcelorMittal likely to pay $672 mn for Essar plant

Adding Resurgent Power to the bid would help Arcelor, the world’s largest steel producer, gain control of the power plant without putting as much strain on its balance sheet. Tata Power Co. owns 26 per cent of Resurgent Power, while ICICI Bank and the sovereign wealth funds of Oman and Kuwait hold the rest, according to a January statement.

Deliberations on the joint offer are still on, and there’s no certainty a deal for the power plant will emerge, the people said. Representatives for Arcelor and Essar declined to comment. A representative for ICICI Ventures also declined to comment. Tata Power said in an emailed statement that it doesn’t comment on market speculation.

Lakshmi Mittal-led Arcelor and the Essar group’s founding family have been slugging it out in court for control of Essar Steel India Ltd., which was being sold under the bankruptcy process. The Madhya Pradesh power plant, which supplies electricity to Essar Steel, would boost Arcelor’s attempts to gain a foothold in India. The plant has been in the midst of debt restructuring with ₹7,500 crore of outstanding loans.

Last year, a consortium including Arcelor was picked by lenders as the winning bidder for Essar Steel with an offer of ₹42,000 crore. The plan was halted by Supreme Court last month pending a review by a bankruptcy tribunal hearing appeals.

Also read:Essar case: Apex court asks ArcelorMittal not to deposit bid amount

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