Vedanta says no revised bid for Essar Steel

Suresh P Iyengar Mumbai | Updated on February 19, 2019 Published on February 19, 2019

The joint bid, if placed, would have been be a win-win for both Vedanta and JSW Steel as Vedanta does not have the expertise to run a steel plant   -  Arunangsu Roy Chowdhury

Company was said to be in talks with JSW to up offer to ₹48,000 cr from ₹36,000 cr

The talks between billionaire Anil Agarwal-owned Vedanta and JSW Steel for submitting a higher joint bid for the stressed Essar Steel asset seem to have not taken off.

According to sources, Vedanta was in talks with JSW Steel the past few weeks to increase its bid from ₹36,000 crore to ₹48,000 crore with both companies contributing ₹24,000 crore each.

Final approval

This was seen as an effort to compete with ArcelorMittal’s bid of ₹43,000 crore, which has been approved by the Committee of Creditors and is pending before the National Company Law Tribunal (NCLT) for final approval.

In response to a BusinessLine query, Vedanta on Tuesday said, “it categorically confirms that it is not in the process of submitting any revised bid for Essar Steel and as a policy we do not comment on market speculation.”

As per the joint venture discussions, sources said, JSW Steel was supposed to operate the 10-million-tonne per annum Essar Steel plant at Hazira with gas supplied by Vedanta’s subsidiary, Cairn India, and iron ore sourced from its Goa mines.

The joint bid, if placed, would have been be a win-win for both the companies as Vedanta does not have the expertise to run a steel plant. Once the mining ban is lifted in Goa, it can use the iron ore within the country for value addition, said an analyst.

The joint venture was banking on NCLT’s Bhushan Power and Steel verdict which approved the revised highest bid of JSW Steel and stressed on maximisation of value as the top priority of the Insolvency and Bankruptcy Code (IBC).

However, the epic corporate battle for the acquisition of Essar Steel has crossed over 560 days, far exceeding the 270 days set out in the IBC for resolution.

Vedanta is the only other eligible candidate in the race for Essar Steel after the consortium of Ruias and the Russian VTB Bank Numetal was declared ineligible by the NCLT.

The Sajjan Jindal-promoted JSW Steel, which had missed submitting the expression of interest for Essar Steel asset during the initial days of bidding, has made several attempts to enter the race.

During the second round of bidding, lenders had rejected JSW Steel’s standalone bid as it had not submitted the EoI in the first round. The company’s another attempt to join hands with Numetal also failed.

Jindal recently supported Essar promoter Ruias’ attempts to repay the entire debt of ₹54,000 crore and said it would save banks and operational creditors from taking a hair cut.

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Published on February 19, 2019
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