ArcelorMittal has made an offer of Rs 48 billion ($672 million) to buy an Essar Power generation plant, outbidding the founding Ruia brothers, according to people with knowledge of the matter.

The non-binding offer from the world’s largest steel producer to lenders of the 1,200-megawatt power plant in Madhya Pradesh compares with a Rs 35 billion settlement offer made by Essar’s founders - Shashi Ruia and Ravi Ruia - the people said asking not to be named, as the discussions are private.

The Ruias and steel tycoon Lakshmi Mittal are slugging it out before courts to gain control of Essar Steel India Ltd., after ArcelorMittal emerged as the winning bidder to buy the alloy maker. The power plant, which supplies electricity to the steel mill, would boost ArcelorMittal’s attempts for a foothold in the Indian market.

Lenders, led by ICICI Bank Ltd., have given ArcelorMittal permission to carry out due diligence of the asset, which is in the midst of debt restructuring with Rs 75 billion of outstanding loans. A firm bid may come only after the due diligence is complete, the sources said.

Spokesman for ArcelorMittal and the Essar group declined to comment, while ICICI’s representative did not respond to a phone call and email seeking comment.

ICICI Bank had filed an insolvency case against the Essar group company last year, but the case stalled after Supreme Court ordered a hold on such moves against power companies. The apex court’s order came on a plea from power producers, who have said that their inability to make timely payments was due to issues including fuel shortages, delayed payment by distribution utilities and slow resolution of tariff claims by regulators.

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