ArcelorMittal Nippon Steel India joins race to buy Srei group firms

ArcelorMittal Nippon Steel India (AM/NS India), a joint venture between global steel majors ArcelorMittal and Nippon Steel, has submitted an expression of interest (EOI) for Srei group companies undergoing insolvency proceedings.

AM/NS India did not comment. ArcelorMittal said it had no comment to offer.

Sources close to the development said whether new participants who were not part of the original list of EOI would be allowed will have to be evaluated.

It will be decided based on commercial wisdom, legal provisions and past court precedence, the sources added.

Srei group companies — Srei Infrastructure Finance and Srei Equipment Finance — had received two resolution plans. Arena Investors LP and Varde Partners had made a joint bid. The other bid was from Shon Randhawa and Rajesh Viren Shah combine.

However, issues emerged with the earnest money deposit (EMD) and the CoC ultimately decided in favour of issuing a fresh RFRP. Sources indicated that issuing a fresh request for resolution plan (RFRP) meant that the process was being opened to EOI participants.

The list of prospective resolution applicants that were finalised after EOI comprised 13 entities.

It included Vedanta, Assets Care & Reconstruction Enterprise, Asset Reconstruction Company (India), Diameter Trading, International Asset Reconstruction Company, JM Financial Asset Reconstruction Company, Jindal Power, Prudent ARC, Edelweiss Alternative Asset Advisors, Riddi Siddhi Gluco Biols (lead partner) & Sherisha Technologies, Shon Randhawa (lead partner) & Rajesh Viren Shah, Arena and VFSI.Whether AM/NS fits in the current process legally will be decided, said sources.

Srei Infrastructure moved Supreme Court against a National Company Law Appellate Tribunal order earlier this year approving ArcelorMittal’s resolution plan for Odisha Slurry Pipeline Infrastructure, dismissing a raft of appeals, including those filed by Srei entities. Srei Infrastructure was a creditor.

OSPIL owns and operates a 253-km slurry pipeline — a critical ancillary unit of Essar Steel and now AM/NS India.

Sources indicated that as per the RFRP, resolution plans would have to be submitted by October 15.

Total admitted claims of financial creditors in Srei stands at Rs 32,749.71 crore. Some of the lenders to the companies are Canara Bank, Union Bank of India, Punjab National Bank, State Bank of India, Bank of Baroda, and Indian Bank.

In October 2021, the Reserve Bank of India superseded the board of directors of Srei Infrastructure Finance and Srei Equipment Finance and appointed an administrator and started the resolution process under bankruptcy law.

The Srei group companies were admitted to the NCLT for bankruptcy proceedings thereafter.