Essar Steel India Ltd, an integrated steel producer with an installed capacity of 10 million tonnes per annum (MTPA), is undergoing Corporate Insolvency Resolution Process (CIRP) under the provisions of Insolvency and Bankruptcy Code.
The expression of interest (EoI) for the company was invited by October 23.
Asked about the rationale for bidding, the spokesperson said IBC allows promoters to bid for their company at the NCLT and there are no limitations.
He added that the entire process is on a purely commercial basis and the final selection is done based on the highest bid offered for the NCLT company.
"This practice of promoters being permitted to bid in bankruptcy/insolvency cases is prevalent in the US, UK and many developed and developing countries," the spokesperson said.
Meanwhile, a source said: "Essar Group, participating in the bid has submitted EoI for Essar Steel along with a letter of comfort from Russia's VTB capital which is a financial services company. It is the investment arm of the VTB group.
A global financial services provider, the VTB group comprises over 20 credit institutions and financial companies operating across all key areas of the financial markets.
The group operates a large international network and the majority shareholder of the VTB Bank is the Russian government, which owns 60.9 per cent of the voting shares.
When contacted with regard to participation in the bid, a Tata Steel spokesperson said, "We keep looking at these options, these are all stressed assets in the country. And as a process...we keep looking at these assets."
A query sent to world's largest steelmaker ArcelorMittal, however, remained unanswered.
A Vedanta spokesperson, when asked in this regard, said the company has not shown any expression of interest.
Essar Steel is among the largest single-location steel producers with a 10 MTPA liquid steel capacity. Besides, it has beneficiation and pellet making capacity of 20 MTPA spread across Vizag and Paradeep.
The company said it has made a gross investment of over Rs 5,000 crore to set up the facilities. Besides, shareholders have infused equity of over Rs 16,000 crore till date.
It employs approximately 4,500 persons directly and more than 30,000 people indirectly.
Among state-owned firms, when contacted, a SAIL spokesperson, denied having any knowledge of the steel PSU submitting any expression of interest.
Steel Minister Chaudhary Birender Singh had last month, when asked about plans for PSUs acquiring stressed assets of companies in the sector recommended for insolvency, had told PTI that "As far as stressed assets are concerned, only a few companies are from the steel sector... One of the PSUs made request (for acquiring) to the Finance Ministry in this regard."
Promoted by Ruias, who recently exited Essar Oil, Essar Steel was among the initial 12 companies identified by the Reserve Bank of India (RBI) for insolvency proceedings.
Led by SBI, lenders in June this year had decided to begin insolvency proceedings against Bhushan Steel, Essar Steel, and Electrosteel Steels by referring them to the National Company Law Tribunal (NCLT) for recovery under IBC.
The decision was taken at a marathon meeting chaired by the State Bank of India.
Essar Steel owes about Rs 45,000 crore to lenders.