The National Company Law Tribunal judgment on Essar Steel on Thursday has come as a major setback for both JSW Steel and Vedanta which had entered the fray in the second round.
The Ahmedabad Bench of the NCLT has given 30 days to both Numetal Mauritius and ArcelorMittal to rectify their bids to meet the resolution professional and committee of creditors’ satisfaction.
However, sources said it is not clear as of now whether the ‘rectification’ allows bidders to make changes in both financial and technical part of their bid.
More clarity would emerge on the execution of order once the Court releases the 90-page order, he added.
Seshagiri Rao, Joint Managing Director, JSW Steel, told BusinessLine that the company is still interested in joining the bid for Essar Steel and more clarity on how this can be done will be planned once the NCLT order is made available in public domain. Vedanta has to move the NCLT separately to direct the resolution professional to consider its bid placed in the second round, said sources. Vedanta did not respond to BusinessLine query.
JSW Steel has bought stake in Numetal India, which is a step-down subsidiary of Numetal Mauritius that has placed the bid for Essar Steel.
New members
If the rectification means the exit of defaulting promoter Ravi Ruia’s son Rewant Ruia from the Numetal consortium, then it has to be seen whether he has to be replaced by the existing investors.
If new members are allowed to replace Rewant Ruia in the consortium, then JSW Steel has a fair chance to enter the fray again, sources said.
Both Russian VTB bank-backed Numetal and world’s largest steel producer ArcelorMittal moved NCLT, against the second round of bids claiming their first bid should be considered eligible.
Both their bids were considered ineligible because the Insolvency and Bankruptcy Code does not allow promoters of a defaulting company to submit a resolution proposal.