Lakshmi Mittal meets Jaitley on Essar Steel bid, conveys 'serious interest'

Essar Steel has about Rs 500 billion in dues to banks and is presently unable to pay

Lakshmi Mittal, promoter of the world's largest steelmaking company, ArcelorMittal, said there had been no communication on any of their bid for Essar Steel. And, that he had conveyed 'serious interest' in acquiring the financially beleaguered Ruia company in a meeting with Union finance minister Arun Jaitley on Friday.

"I think we can create value in Essar Steel with our experience," said Mittal. The meeting came two days after reports that ArcelorMittal and Numetal Mauritius had been disqualified from bidding under the insolvency resolution process.

Mittal wouldn't comment on Numetal's bid. The latter stated on Friday that it had given a "compelling resolution plan" for revival of Essar Steel, which has about Rs 500 billion in dues to banks and is presently unable to pay. It was referred to the National Company Law Tribunal last year.

"We have placed a well-planned bid for Essar Steel," Mittal said. "No bid was rejected by the Resolution Professional, from what we've heard."

Numetal said what it had offered included a "detailed turnaround plan to address technological, operational and financial issues in both the short and long term".

One of Numetal's shareholders, VTB Bank PJSC of Russia, one of the largest emerging market banking groups, listed on the Moscow Exchange and London Stock Exchange. Its market capitalisation is $10.9 billion and total assets are a little more than $215 bn. The bank was one of the financiers that helped in Rosenft's purchase of Essar Oil.

Earlier this week, there were reports that bids by both the companies in question had failed the eligibility test of the legal advisors appointed by the Resolution Professional (RP), as both bidders had connections with non-performing assets in India. The Insolvency and Bankruptcy Code (IBC), after an amendment in November, bars promoters with the shareholding in other companies that have defaulted on loans from bidding.

Questions were raised about ArcelorMittal's eligibility, as it was a promoter of Uttam Galva, which featured in the Reserve Bank of India's list of defaulting companies. ArcelorMittal held 29 per cent in Uttam Galva Steels till earlier this month, which it transferred to Sainath Trading Company, a co-promoter group entity.

The RP for Essar Steel is yet to convey the decision on the qualification of the two bids. The committee of lenders is expected to meet soon on the matter. If the bids are ultimately rejected on the basis of legal opinion, it might prompt either or both bidders to move court. Both think they are eligible under the IBC. Law firms Cyril Amarchand Mangaldas and Grant Thornton conducted the eligibility test for both the bids.