Essar Steel is a great opportunity for us to establish a presence here: Lakshmi Mittal

Suresh P Iyengar Mumbai | Updated on May 06, 2018 Published on May 06, 2018

Lakshmi Mittal   -  AFP

Steel magnate Lakshmi Mittal, CEO and Chairman of ArcelorMittal, is going all out to acquire Essar Steel as part of his ambition to finally enter the Indian market.

Even as he fights it out with the only other contender — the VTB Bank (Russia)-promoted consortium Numetal Mauritius, Mittal is confident that ArcelorMittal is the best player to bring Essar Steel back on track.

“I certainly would not describe it as a last chance but it is a great current opportunity for us to establish a meaningful presence in India. And our conviction is that ArcelorMittal is the most credible and suitable custodian for this asset,” Mittal told BusinessLine.

“Essar Steel would benefit from an owner that has the expertise to set the company on a successful track for the future — that means a proper industrial company with management who know how to generate value from a steel plant not just for today but for the longer term,” he added.

However, for Mittal, the biggest hurdle has been the insolvency laws under which Essar Steel’s assets are being sold. Mittal believes that the existing laws need to be amended.

“What is remarkable is that this (Essar Steel) is a test case for the new insolvency law; as we have seen, the path so far is not straightforward, as previous owners (the Ruia family) are not willing to give up their assets readily,” he said.

“Many are watching to see whether the IBC will achieve its objectives of delivering a fair return to creditors and a long-term custodian for the asset that defaulted under its previous owners, in a timely manner,’ Mittal said.

He said though the insolvency laws itself is a significant reform for India’s banks, getting it right is critical to the success of the country’s financial and economic reforms. “(Section) 29A in particular has caused unexpected consequences and I would expect to see amendments being implemented though the spirit of the law is clear. In reality it is creating a lot of confusion and delay,” Mittal added.

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Published on May 06, 2018
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