Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / News/  Advantage ArcelorMittal as Numetal Mauritius may not bid for Essar Steel
BackBack

Advantage ArcelorMittal as Numetal Mauritius may not bid for Essar Steel

Numetal Mauritius will not be able to settle outstanding dues of associated companies even as ArcelorMittal paid $1 billion to satisfy the eligibility criteria for Essar Steel bidding

If Numetal Mauritius bows out, only ArcelorMittal and Vedanta will remain in the race to buy Essar Steel, having offered ₹42,000 crore and ₹34,000 crore, respectively, for the bankrupt steelmaker. Photo: APPremium
If Numetal Mauritius bows out, only ArcelorMittal and Vedanta will remain in the race to buy Essar Steel, having offered ₹42,000 crore and ₹34,000 crore, respectively, for the bankrupt steelmaker. Photo: AP

Mumbai: Numetal Mauritius will not be able to settle outstanding dues of associated companies even as ArcelorMittal paid 7,469 crore on Wednesday to satisfy the eligibility requirement for bidding for Essar Steel Ltd, said three people aware of the development. This follows the Supreme Court’s two-week deadline for the two companies to settle the dues passing.

A spokesperson for Numetal Mauritius declined to comment on whether the consortium had settled the outstanding dues. But a person directly aware of the development said the consortium has decided against going ahead with the payment, amounting to at least 49,000 crore.

Numetal’s plan has narrowed the race for Essar Steel to only two bidders—ArcelorMittal and Vedanta Resources Plc.

However, on 8 October, VTB Bank of Russia, which is a majority shareholder in the Numetal Mauritius consortium, approached the apex court seeking permission to submit a solo bid.

“Prima facie, it appears that Numetal will not be eligible to bid for Essar Steel. While (according to publicly available information) VTB has petitioned at the apex court to bid solo for the asset, it will have to undergo fresh scrutiny under Section 29A of the IBC (Insolvency and Bankruptcy Code) and the outcome will depend on the decision by the Supreme Court, committee of creditors and the resolution profession," said Siddharth Srivastava, partner, Restructuring and Insolvency, Link Legal.

Section 29A of the IBC bars promoters of non-performing assets and their relatives from bidding for the same assets through different channels.

“Numetal Mauritius could have approached the Supreme Court seeking extension of the deadline for repayment of dues but since it hasn’t done so yet, it is unlikely that such a plea will be entertained now," Srivastava said.

ArcelorMittal will submit the proof of payment to the creditors of Essar Steel on Friday. The CoC is also scheduled to meet on Friday to discuss the status of the resolution process.

In the most recent round of bidding, ArcelorMittal submitted a bid of 42,000 crore for Essar Steel, Numetal Mauritius offered 37,000 crore and Vedanta placed a bid of 35,000 crore.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 19 Oct 2018, 12:33 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie