ArcelorMittal says its bid is eligible for Essar Steel

After Russian bank VTB termed ArcelorMittal’s bid for Essar SteelBSE 0.41 % ineligible, the company hit back on Monday, saying that its offer is eligible. “We are confident about the integrity of the process, which will be adjudicated by the resolution professional. We continue to believe our bid is eligible and that, as the world’s leading steel company in partnership with Nippon Steel and Sumitomo Metal, we have unrivalled industry expertise and a demonstrable track record that is very relevant for Essar Steel,” Arcelor-Mittal said in a statement.

Both VTB and Arcelor-Mittal have offered resolution plans for Essar Steel, that owes more than Rs 52,000 crore to its creditors. The auction of Essar Steel, one of the largest cases under the insolvency process, is being overseen by resolution professional Satish Kumar Gupta.

VTB has placed its bid through a consortium called Numetal. Both Numetal and ArcelorMittal’s bids face eligibility tests as India’s insolvency rules prohibit promoters and parties related to defaulting companies from submitting a resolution plan.

Numetal has Rewant Ruia, son of Essar Steel co-founder Ravi Ruia, as a shareholder, while ArcelorMittal and its chairman Lakshmi Mittal held stakes in two defaulting companies for more than a year prior to the commencement of the resolution process of Essar Steel. Both Numetal and ArcelorMittal have claimed that their bids don’t violate rules and that their proposals have been vetted by prominent law firms. The eligibility results of both the bids were expected to be out on Monday, but it has now being pushed to a later date.

Essar Steel