Laxmi Mittal-owned AreclorMittal and Numetal Mauritius have placed their bids to acquire the stressed asset of Ruias-owned Essar Steel.
Numetal is 40 per cent owned by Russian VTB Bank along with SSG Capital, Rewant Ruia and a couple of other partners. Rewant Ruia is Essar Group’s promoter Ravi Ruia’s son.
The deadline for accepting financial bids expired on Monday. It was expected that at least four bidders, including Tata Steel and Vedanta, would put in their bids.
The other contender JSW Steel had already said it was not keen on Essar Steel as it had put in a ₹30,000-crore bid for Bhushan Steel.
ArcelorMittal said its subsidiary ArcelorMittal India Pvt Ltd (AMIPL) has submitted an offer for Essar Steel India in-line with the corporate insolvency resolution process.
The offer has set out a detailed industrial plan for Essar aimed at improving its performance and profitability and ensuring it can participate in the anticipated growth of steel demand in India, said ArcelorMittal.
Investment plan
Lakshmi Mittal, Chairman and CEO, ArcelorMittal, said Essar provides a compelling opportunity for ArcelorMittal to enter the high growth Indian steel market. The offer submitted by AMIPL includes a detailed investment plan to address operational issues in Essar, he added.
Aditya Mittal, Group CFO and CEO, ArcelorMittal Europe, said the opportunity aligns with the group’s strategy of selectively investing in attractive projects to maximise long-term shareholder value. “India is expected to be the world’s fastest growing economy over the next decade and as the economy grows its steel intensity will also increase,” he added.
Sources said that the bids could range between ₹28,000 crore and ₹32,000 crore.
Essar Steel, an integrated flat steel producer, has crude steel capacity of 9.6 million tonnes per annum and is operating at 6.1 mtpa due to various constrains. Lenders led by State Bank of India had filed insolvency against the company in NCLT to recover over ₹45,000 crore.
Great Indian sale
Tata Steel is in the process of investing ₹25,000 crore to expand production capacity in its Kalinganagar plant to 8 million tonne from 3 mtpa and has placed ₹24,000 crore bid for Bhushan Steel.
Vedanta has almost bagged another stressed asset Electrosteel Steel for ₹4,500 crore.
Sajjan Jindal-promoted JSW Steel had joined hands with private equity arm of Piramal Enterprises for placing ₹29,700 crore bid for Bhushan Steel with offer to pay ₹28,000 crore upfront and has formed joint venture AION Capital to emerge as lone bidder for Monnet Ispat by agreeing to pay ₹3,700 crore. JSW Steel is also the top contender for Bhushan Power with a bid of ₹13,000 crore.