Numetal, the company that has bid for Essar Steel, is 40 per cent owned by Russia’s VTB group and 25 per cent by a trust where Rewant Ruia, son of Ravi Ruia, is the trustee. The balance is held by Russian engineering firm Tyazhpromexport (TPE), and a trading company.
TPE is a design and engineering consultant as well as an equipment supplier. The company, which has designed many steel plants across the world, played an active role in the modernisation of SAIL’s Bhilai and Bokaro plants.
Sources close to the development said the bids for Essar Steel would be opened on Wednesday. Essar Steel, which has a steelmaking capacity of 9.7 million tonnes, received only two bids on Monday, from Numetal and ArcelorMittal India.
The bids will be vetted by legal experts. The Ruias' problem is that according to the IBC amendment last November promoters cannot bid for stressed assets unless they pay off their dues.
The Ruias have, however, made it clear that they will not be paying the dues to make the account standard.
Essar Steel has no management control over Numetal. Numetal is pitted against ArcelorMittal. The LN Mittal-led company will also have to clear the eligibility test. The steelmaker has sold its stake in Uttam Galva Steels and LN Mittal has sold his personal shareholding in KazStroyServices (KSS), which owns 100 per cent in KSS Petron Private Limited. Both the transactions happened ahead of the Essar Steel bid.
Essar Steel will be one of the biggest debt resolution cases for lenders. The company owes banks around Rs 440 billion and was on the Reserve Bank of India’s first list of defaulting companies for referral under the Insolvency and Bankruptcy Code (IBC).