By 20 April, 2018
Numetal, ArcelorMittal back in the game for Essar Steel
Photo Credit: Reuters

In a fresh twist to the insolvency proceedings of Essar Steel Ltd, the lenders to the beleaguered steelmaker will again have to consider two bids made by Numetal Mauritius and ArcelorMittal SA that they had earlier rejected.

The Ahmedabad bench of the National Company Law Tribunal (NCLT) on Thursday directed the resolution professional and the committee of creditors of Essar Steel to review the original bids again.

Last month, the planned auction for Essar Steel suffered a setback when the resolution professional disqualified the offers submitted by steel giant ArcelorMittal and Numetal.

Numetal and ArcelorMittal were the only two bidders in the first round.

ArcelorMittal and Numetal were termed ineligible as per Section 29A of the Insolvency and Bankruptcy Code, which bars related parties or owners of loan defaulting companies to bid for stressed assets.

Numetal Mauritius is a joint venture between Russia's VTB Bank and Rewant Ruia, the son of Ravi Ruia, one of the promoters of Essar Steel. ArcelorMittal had a significant stake in Uttam Galva Steels Ltd till February. Uttam Galva is one of the firms identified by the Reserve Bank of India in its second list of defaulters.

Both Numetal and ArcelorMittal had moved the NCLT challenging their ineligibility.

For billionaire Lakshmi Mittal-led ArcelorMittal, the bid is an important one as it has been seeking to set up its own plant in India for many years.

"We have put forth a very compelling resolution plan both industrially and financially. We hope our proposal will be considered by the Committee of Creditors with a fair and holistic view," Numetal said in an email statement on Thursday.

Essar Steel is among the 12 large non-performing asset accounts identified by the RBI in its first list for loan resolution under the Insolvency and Bankruptcy Code. Essar Steel owes its lenders nearly $8 billion.

Earlier this month, billionaire Sajjan Jindal-led JSW Steel Ltd said it had joined as an investor in Numetal and had submitted a joint bid in the second round of bidding for Essar Steel.

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