South Korean steel manufacturer Posco
may consider bidding for debt-ridden Essar
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, Posco
India Chairman and Managing Director Gee Woong Sung said, "We don't have a formal position on this right now."
bids for Essar
Steel, the deal would benefit Posco
in boosting its India plans. Posco
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, Posco
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.
is also reported to be looking at Essar
Steel, as the latter would give the firm a presence in the West. A Tata Steel
spokesperson said, "Tata Steel
evaluates various strategic opportunities on an ongoing basis. The company would not like to comment on market speculation."
At the recent Tata Steel
annual general meeting — while responding to shareholder queries on whether the firm would consider buying stressed steel assets, including Essar
Steel — Tata group Chairman N Chandrasekaran had said that the company was open to “everything”.
Sajjan Jindal's JSW Steel
has been keen on Bhushan Steel, which would give it a foothold in the East, but the firm’s interest in Essar
Steel can not be ruled out.
On a direction by the Reserve Bank of India, banks had taken Essar
Steel to the National Company Law Tribunal.
An interim resolution professional has been appointed to oversee the insolvency proceedings. Essar
Group Director Prashant Ruia
has said in recent interviews that Essar
would submit a resolution plan for the company.