ArcelorMittal, Vedanta, NuMetal-JSW bid for Essar Steel in 2nd round

A grouping led by world's biggest steelmaker ArcelorMittal, mining mogul Anil Agarwal-led Vedanta and a consortium of Russia's VTB Capital-backed NuMetal and JSW put in bids to takeover bankrupt Essar Steel in the second round of bidding today.

In the first round, NuMetal and ArcelorMittal were the only two parties that bid to buyout Essar Steel but the insolvency resolution professional overseeing the auction was advised to reject both the bids owing to their promoters being linked to defaulter companies. Revised bids were due today.

Sources privy to the development said three groups bid for Essar Steel.

NuMetal, majority-owned by Russia's second largest bank VTB Group, shed Aurora Trust, which has links to Rewant Ruia, son of Essar Steel promoter Ravi Ruia, in the second round of bidding. While its promoters bought out Aurora Trust's 25 per cent stake, NuMetal aligned with JSW to make the revised bid today.

ArcelorMittal, which had been disqualified in the first round for being listed as a promoter of loan defaulter Uttam Galva Steel, bid along with Nippon Steel and Sumitomo Metal Corporation.

The global steel giant got itself declassified as a promoter of Uttam Galva Steel. The company sold its entire holding in Uttam Galva Steel before the first round of bids in February but its name had continued as a promoter on stock exchanges, resulting in its disqualification.

Sources said Vedanta was the surprise entrant today. Vedanta has already won a bid to acquire bankrupt Electrosteel Steels Ltd in an insolvency auction.

Confirming bidding for Essar Steel, Anil Agarwal said the company has made a compelling bid. "I have put a very lucrative bid. This is a great opportunity... When we want it, we must have it."
Lakshmi Mittal, the Chairman and CEO of ArcelorMittal, said: "The aim of the resolution process is to find a strong, new, capable owner for Essar Steel and maximize returns to creditors. We believe that ArcelorMittal, together with NSSMC, has the most relevant credentials and experience and is the most credible owner for Essar Steel given our decades of steel industry expertise, backed up by industry leading research and development and a wide range of innovative product capabilities."