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Posco likely to bid for Rs 37,284-crore debt-ridden Essar Steel

If bidding happens, the deal would benefit Posco in boosting its India plans

Ishita Ayan Dutt & Surajeet Dasgupta  |  Kolkata/ New Delhi 

Photo: Reuters
At present, Posco has a cold rolling and galvanising project in Mangaon, Maharashtra. Photo: Reuters

South Korean steel manufacturer may consider bidding for debt-ridden Steel, currently facing proceedings under the Insolvency and Bankruptcy Code, according to merchant banking sources close to the development. Steel's debt in 2015-16 financial year stood at Rs 37,284 crore. When contacted, India Chairman and Managing Director Gee Woong Sung said, "We don't have a formal position on this right now." If bids for Steel, the deal would benefit in boosting its India plans. came to India with plans for a mega steel plant, but the plans took a bit hit. It had signed a deal with the Odisha government in 2005 for a 12-million-tonne steel plant. But protests over land acquisition and change in mining policies put the project on the backburner. At present, has a cold rolling and galvanising project in Mangaon, Maharashtra, with a capacity of 0.45 million tonne for coated steel and 1.8 million tonnes for cold rolled steel.

The unit supplies products to automotive customers. Other bidders for Steel, which has a capacity of 10 million tonnes, could be ArcelorMittal, and was understood to be in discussions with bankers for advice on bidding for stressed assets, primarily Steel and did not respond to an e-mail sent by Business Standard. is also reported to be looking at Steel, as the latter would give the firm a presence in the West. A spokesperson said, "evaluates various strategic opportunities on an ongoing basis. The company would not like to comment on market speculation." At the recent annual general meeting — while responding to shareholder queries on whether the firm would consider buying stressed steel assets, including Steel — Tata group Chairman N Chandrasekaran had said that the company was open to “everything”. Sajjan Jindal's has been keen on Bhushan Steel, which would give it a foothold in the East, but the firm’s interest in Steel can not be ruled out. On a direction by the Reserve Bank of India, banks had taken Steel to the An interim resolution professional has been appointed to oversee the insolvency proceedings. Group Director has said in recent interviews that would submit a resolution plan for the company. graph

First Published: Sat, August 26 2017. 00:30 IST