JSW Steel wants to put forth an independent bid in the ongoing race to acquire the bankrupt steelmaker Essar Steel. Recent reports have confirmed that JSW Steel had apparently made an initial bid for Essar Steel together with VTB Capital-run Numetal.
The Supreme Court has outlined the way forward for the acquisition of Essar Steel after it heard all the arguments presented under the Insolvency and Bankruptcy Code (IBC). Subsequently, JSW might have to approach the court for permission before placing a bid.
Joint managing director at JSW Steel, MV Seshagiri Rao, had said in a statement that the company was in the process of seeking legal opinion to know if it is eligible to bid for Essar Steel, along with Numetal, ArcelorMittal and Vedanta. The views of the resolution professional (RP) and the committee of creditors as well as the legal opinions received will influence JSW’s decision to bid or not, Rao added.
According to credible sources, Numetal would become qualified to bid for Essar Steel if it pays off its dues of Rs 49,000 crore. Where ArcelorMittal had supposedly bid Rs 42,000 crore for Essar Steel, Numetal’s proposal was reported to be around of Rs 37,000 crore and Vedanta was offering an amount of nearly Rs 35,000 crore.
Records show that on October 4 this year, the apex court had given both ArcelorMittal and Numetal a final opportunity to clear their taint of ineligibility by clearing the dues to their respective creditors within two weeks. After that, the CoC will deliberate on the propositions over the course of eight weeks and accept the best plan from those submitted by the obligatory majority of 66%.
The apex court has specified that if the CoC does not find any plans to be acceptable, Essar Steel would be liquidated, the sources mentioned. Industry experts believe the intention of JSW Steel to buy Essar Steel is quite obvious, as the company is aiming to own up to 25 million tons of steelmaking capacity in India in the imminent future, as compared to its existing capacity of 19.5 million tons.