 "Essar Steel")
World's leading steel giant ArcelorMittal has sweetened its offer for Essar Steel, as the bids received in the second round for the debt-ridden firm were opened by its lenders Monday.
Without disclosing the amount, the Luxembourg-headquarterd firm said that it has submitted a revised proposal to Essar Steel India Ltd's (ESIL) Committee of Creditors (CoC).
The revised offer also includes a commitment to pay Rs 70 bn dues to the financial creditors of Uttam Galva and KSS Petron to be eligible in the race to acquire Essar Steel.
"ArcelorMittal confirms that it has today submitted a revised proposal to Essar Steel's Committee of Creditors for the acquisition of ESIL," ArcelorMittal said in a statement Monday.
"The financial terms of the proposal are confidential, but represent a material increase to the previous offers made by the company," it added.
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The revised offer, which includes a commitment to pay the entire amount due to the financial creditors of Uttam Galva and KSS Petron, therefore represents unprecedented value to all concerned creditors, the statement added.
"Through the revised offer ArcelorMittal demonstrates its serious commitment to India, creditor banks and all ESIL's stakeholders," it said.
Apart from ArcelorMittal, Russia's VTB Group-backed Numetal Ltd and mining baron Anil Agarwal-led Vedanta are in the race to acquire Essar Steel.
The Resolution Professional, overseeing the auction of Essar Steel to recover over Rs 490 bn of unpaid loans had sent emails to all the three bidders to be present Monday for the opening of the second round of bids.
This followed a National Company Law Appellate Tribunal's (NCLAT) judgement last week on the eligibility of bids. It had ruled that Numetal's Rs 370-bn second-round bid for Essar Steel is valid, but asked rival bidder ArcelorMittal to clear Rs 70 bn dues of its previously associated firms within three days to qualify for the acquisition.
A two-member bench of NCLAT headed by its Chairman Justice S J Mukhopadhaya in a 68-page order had asked lenders, who are auctioning Essar Steel to recover over Rs 490 bn of unpaid loans, to consider the second round bid of Numetal and mining baron Anil Agarwal-led Vedanta.
ArcelorMittal's bid will be considered if it pays dues by September 11.
For ArcelorMittal India (AMI), which was the only other bidder besides Numetal in the first round, the NCLAT held that it needs to remove the "stigma of defaulter" attached to it because of its previous 29 per cent stake in Uttam Galva Steel and KSS Petron.
The NCLAT held that the first round of bid by Russia's VTB Group-backed Numetal in February was ineligible as the firm was 25 per cent owned by Rewant Ruia, scion of Essar Steel's promoter Ruia family. But, he exited the firm before the second round of bid was submitted in March, making Numetal eligible.
Numetal and steel tycoon Lakshmi Mittal-led ArcelorMittal had in February submitted separate bids to take over Essar Steel. The Committee of Creditors (CoC), however, disqualified both bids saying their promoters were tied to companies, which were bank loan defaulters and so ineligible under Section 29A of the Insolvency and Bankruptcy Code.
The second round of bids was called where JSW Steel joined Numetal to put in a bid of Rs 370 bn, while Vedanta Ltd entered the fray as a third bidder. AMI too put in a bid.
