Even if the bid is put in by either company, the offer will be jointly funded
JSW Steel and Vedanta are in talks for making a joint bid for Essar Steel as a last attempt in keeping ArcelorMittal at bay. Source familiar with the matter said that a bid from either of the company, or together, could be made in the next week.
Apparently, this bid can be in a range of Rs. 45,000 crore to Rs. 48,000 crore and will be made on the basis of value maximization, though the bid made by ArcelorMittal is of Rs. 42,000 crore. Sources further said that the firms were considering if Vedanta should make the bid, or JSW Steel.
Reports confirm that JSW Steel had not submitted an expression of interest for Essar, and therefore, in the second round of bidding, the company had to partner Numetal as a step-down subsidiary. Both JSW Steel and Vedanta were aspirants for Essar Steel in the second round. Even if either companies bid, it would be funded jointly.
After the Supreme Court ordered Numetal and ArcelorMittal for clearing dues on the account of defaulting firms which the companies were associated with, Numetal allegedly moved out of the race, and in turn, JSW Steel. Among ArcelorMittal and Vedanta, the former emerged as the preferred bidder.
Purportedly, as per the National Company Law Appellate Tribunal (NCLT) directive, this bid is seemingly to be made by Feb. 28, and by the same date, the NCLT would have to pass orders on the resolution plan of Arcelor.
Reports further state that Ruias, shareholders of Essar Steel, had made a last-minute offer of Rs. 54,000 cr. for settling the dues of the firm, which got rejected by the NCLT. This order was then challenged by Ruias in the appellate tribunal.
Essar Steel directors, which include Prashant Ruia, had filed a fresh application in the NCLT that the company should be consulted by the creditors’ committee while considering resolution plans, that are in line with a Supreme Court order.