Numetal, ArcelorMittal Ineligible To Bid For Essar Steel
Lenders to Essar Steel Ltd. today decided to reject both resolution plans submitted for the company under the insolvency and bankruptcy process, two bankers in the know have confirmed.
In a meeting held in Mumbai, the committee of creditors was presented with the findings of Resolution Professional Satish Kumar Gupta on the eligibility of the two bidders – Numetal Mauritius and ArcelorMittal India. The resolution professional found both companies to be ineligible to bid for Essar Steel under Section 29A of the Insolvency and Bankruptcy Code, the bankers said.
Lenders will reinvite bids from the six companies which had submitted expressions of interest for Essar Steel. That means, both Numetal and ArcelorMittal can submit revised bids after they remedy the specific issues with respect to ineligibility under the IBC, the bankers quoted above said. The other four companies which had sbmitted EoIs for Essar Steel include Nippon Steel & Sumitomo Metal Corporation, Tata Steel, Vedanta Group and Steel Authority of India Ltd.
Both Numetal and ArcelorMittal’s bids have been under a cloud after the government amended the Insolvency and Bankruptcy Code late last year to stop defaulting promoters from bidding for insolvency assets. In case of Numetal, Rewant Ruia, son of Essar Group co-Founder Ravi Ruia, is a minority shareholder in the company. ArcelorMittal India was a 29 percent shareholder and co-promoter in Uttam Galva Steel Ltd. that’s been declared a non-performing asset. The India arm of the Luxembourg-based company exited its Uttam Galva stake earlier this year, as disclosed in an exchange filing.
Earlier today, the Mauritius-based Numetal sought a declaration from the Ahmedabad bench of the NCLT on its eligibility to bid for Essar Steel, saying that its resolution plan was not adequately assessed by the resolution professional appointed in the matter.
Essar Steel is one of the largest companies being restructured under the insolvency process and it owes more than Rs 49,000 crore to its financial creditors. It was one of the 12 accounts shortlisted by the Reserve Bank of India for immediate insolvency action in June 2017.