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Insolvency: Tatas, Ruias submit bids for debt-laden Essar Steel

JSW Steel is said to have skipped submitting a resolution plan for Essar Steel

Aditi Divekar & Veena Mani  |  Mumbai/New Delhi 

Steel Sector

and the themselves have put in bids for debt-laden after the company was put up for sale under the (IBC). Sajjan Jindal-led JSW Steel, aggressive in bidding for Monnet Ispat’s and Bhushan Steel’s businesses, is said to have skipped submitting a resolution plan for

“The allows promoters to bid for their company. In a number of other cases as well, promoters have been showing an interest in their own companies,” said a person aware of the proceedings. 

The promoter is not obligated to pay all the money upfront and can pay a portion of the total. “The Essar promoters plan to raise funds from other investors and pay the lenders. This is a classic case where the promoter wants to get the company back,” said the person quoted above.

is a very aggressive bidder for But apart from them, interest is very thin though the asset is coast-based,” said another person close to the development. 

Both and are looking to expand in the domestic market via the inorganic route, and have set targets in terms of capacity expansion and increase of market share. Calls made to went unanswered, while an e-mail sent to remained unanswered till the time of going to print.

Persons close to the development also said that since the 6.8-million tonne sponge iron capacity of is gas-based, interest from domestic as well as overseas parties is thin.

The company, which had a debt of Rs 37,284 crore till March 2016, had earlier taken its lenders State Bank of India and Standard Chartered Bank, the Reserve Bank of India and the National Company Law Tribunal (NCLT) to the Gujarat High Court, opposing insolvency. 


has a 10-million tonne facility in Hazira, Gujarat. The debt-laden company is in the high-margin flat steel products business. Since there is a demand for flat steel in the domestic as well as export market, sales volumes of the company are seen as a positive for a new buyer even during the usual lean season between July and September.

In terms of market share, has a strong presence in the western and northern parts of the country. The National Steel Policy 2017 aims to increase domestic production of steel to 300 million tonnes by 2030. Given the thrust on increasing domestic steel production and estimates of a rise in demand, NCLT-listed firms are attractive purchases at this juncture where setting up greenfield capacities could mean unending approvals. 

The NCLT has begun processing cases involving other steel like Bhushan Steel and Electrosteel Steels. The three steel have a total installed capacity of 18.11 million tonnes. 

Delhi-based Bhushan Steel, the third-largest secondary producer in the country, has a capacity of 5.6 million tonnes and is located in iron ore-rich Odisha. Electrosteel Steels, according to its FY13 annual report, was setting up a 2.51-million tonne greenfield integrated steel plant in Jharkhand. Monnet Ispat, another firm facing insolvency proceedings, has a 1.5-million tonne capacity.

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First Published: Tue, October 24 2017. 02:51 IST
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