ArcelorMittal said on Friday that Essar Steel creditors voted in favour of its Rs 42,000-crore bid and have issued a letter of intent to sell the asset to the company. The development indicates that the lenders haven’t entertained the Ruia family’s Rs 54,389-crore last-minute settlement offer and the former owner is set to move the court on this.
Though the creditors have approved ArcelorMittal’s proposal, the Essar Steel transaction also requires the consent of the National Company Law Tribunal (NCLT) before the world’s largest steel producer becomes the owner of India’s No. 3 maker of the metal, which has an annual capacity of 10 million tonnes (mt). The $69-billion ArcelorMittal — which is controlled by India-born Lakshmi Mittal, the London billionaire — said that it expects the approval from the NCLT to come before the end of the year.
The sale of Essar Steel is the most keenly watched auction process under India’s still nascent bankruptcy law, where the banks are recovering dues with the least haircut. The Ruias plan to challenge the decision by early next week.
The erstwhile promoters are awaiting formal response from the creditors on their Rs 54,389-crore settlement offer, which was made under section 12A of the bankruptcy code in a bid to take the company out of the insolvency net. Read More
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