Numetal, ArcelorMittal Meet Lenders To Prove Eligibility To Bid For Essar Steel

The committee of creditors of bankrupt Essar Steel Ltd. today discussed eligibility issues with Numetal and ArcelorMittal for bidding for the 10-million steel mill at Hazira, people familiar with the development said.

These companies were given time till May 1 by the lenders to give then in writing that they were fit to bid.

“The CoC had given them time till Tuesday evening to submit in writing why they are eligible to bid. Today, both the companies gave presentation to the CoC on their eligibility,” said a banker.

A Numetal official confirmed that the company was given the opportunity to discuss its eligibility with the CoC, while an ArcelorMittal spokesman confirmed being called for the meeting with the lenders. “We are working with the CoC to address their concerns, if any,” Numetal spokesman told PTI.

Russia's VTB Capital-backed Numetal and ArcelorMittal are the only two bidders for Essar Steel in the first round of bids as NCLT has stayed the second round of bids.

The first round of bids were rejected by the resolution professional and the lenders, citing technical reasons or ownership issues (promoters of these bidders being related to the original defaulting promoters) leading to the re-bids, which had three bidders--Numetal-JSW, ArcelorMittal- Nippon Steel, and Vedanta.

In the April 24 meeting, the CoC had raised certain compliance issues under Section 29A-c of the IBC.

On April 26, Numetal had moved the National Company Law Appellate Tribunal in new Delhi against an order allowing rival ArcelorMittal to clear bank dues of associate companies so that it can become eligible for acquisition of Essar Steel. ArcelorMittal has challenged its disqualification from bidding.

The NCLAT will hear the petitions again on May 17 filed by Numetal and ArcelorMittal India challenging eligibility criteria.

Essar Steel owes around Rs 49,000 crore to over 30 banks.