Lenders reject bids by Numetal, ArcelorMittal for Essar Steel, to go for fresh round of bidding

Lenders said bids by both the parties were found ineligible under Section 29A of the IBC, and have set an April 2 deadline for a second round of bidding for Essar Steel.

business Updated: Mar 21, 2018 17:23 IST
Press Trust of India, Mumbai
Essar Steel sale,ArcelorMittal,NuMetal
Essar Group headquarters in Mumbai, India. The company owes over Rs 45,000 crore to over 30 bankers.(Reuters File Photo)

The State Bank of India-led consortium of lenders to Essar Steel rejected bids by both Numetal and ArcelorMittal on Wednesday, after finding them ineligible under the amended Insolvency & Bakruptcy Code (IBC) which debars related parties from bidding.

The decision was taken at a meeting of the Essar Steel’s committee of creditors (CoC) in New Delhi on Wednesday.

“...(Numetal and ArcelorMittal) were found to be ineligible under Section 29 A of the IBC. They did not fall under the satisfactory criterion that the promoters’ link should not be there or connected persons should not be there,” a banking source told PTI.

While ArcelorMittal India has been found ineligible for its joint venture with Uttam Galva, which is pending resolution with the NCLT, Numetal’s bid was rejected owing to the fact that one of the promoters of the special purpose vehicle is Rewant Ruia, son of Essar Group promoter Ravi Ruia, who iin turn is one of the original promoters of Essar Steel.

Lenders have also set an April 2 deadline for the second round of bidding for Essar Steel, which owes over Rs 45,000 crore to over 30 bankers.

Bankers said if both the companies de-link their connection from the promoters, they can bid again.

Recent amendments to the IBC had added a new clause to Section 29 (A) which debars related parties from bidding for NCLT assets.

First Published: Mar 21, 2018 17:21 IST