Russia's VTB Group may bid for the debt-ridden Essar Steel alone

Russia's VTB Group is likely to bid alone for the debt-ridden Essar Steel. Earlier the Russian bank was making a plan to take over the company via Numetal Mauritius - which had a Ruia family interest.

According to the Supreme Court order, both Numetal and ArcelorMittal will have to first clear all old dues and then bid for Essar Steel. The SC gave both companies two weeks time to cure their ineligibility by paying past dues to banks. This has made the cost of acquisition very high for both companies. The Section 29A of IBC bans promoters of defaulting companies to make a bid for other bankrupt companies sent for debt resolution under IBC.

This also means the chances of both Vedanta and JSW Steel have brightened as they can make individual bids. Both have acquired one steel plan each under the IBC and are eligible to acquire other assets.

Lenders said they will seek a third round of bidding for Essar Steel and with both Numetal and ArcelorMittal offering close to Rs 420 billion for the company in the Supreme Court, they will not take any haircut on the asset.

In most of the other companies, the banks have taken a substantial haircut on their outstanding dues.

VTB had earlier funded Rosneft's acquisition of Essar Steel. on Friday, the Russian financial group’s chief executive, Andrei Kostin said, "VTB Bank’s interest in India’s Essar Steel remains unchanged."