After Essar, ArcelorMittal and JSW Steel might find themselves vying for yet another stressed asset.
The two steel majors have reportedly bid for Asian Colour Coated Ispat, a downstream unit in the sector that was on the Reserve Bank of India’s (RBI's) second list of banks’ major non-performing assets (NPAs).
Tuesday was the final day for finalising the list of resolution applicants for Asian Colour Coated. Sources aver Arcelor was one applicant. The next step would be to offer resolution plans for the insolvent entit, likely to be early February.
Kuldip Kumar Bassi, the Resolution Professional in the case, declined to comment. ArcelorMittal would not comment and JSW Steel officials were not available.
Apart from JSW Steel and ArcelorMittal, 11 others are believed to be in the fray.
Asian Colour Coated has debt of around Rs 4,900 crore. It has a cold rolling mill, with downstream galvanising and colour coating lines, at Bawal, Haryana. The manufacturing facilities are spread across three locations in proximity to Delhi and Mumbai, and caters to markets across Europe, Africa, Latin and North America, beside India.
For both JSW Steel and ArcelorMittal, it seems to make strategic sense to bid for Asian Colour Coated. JSW has an aggressive expansion plan and is on the lookout for smaller downstream units. It bid for Uttam Value Steels, too. JSW’s more aggressive bid, however, is for Bhushan Power & Steel.
As for Arcelor, industry watchers say the global steel major could be working on building its downstream capacities, after having bid for Essar Steel, an upstream facility. It is also looking at taking ownership of Uttam Galva Steels, again a downstream facility, after clearing the debts there. Uttam Galva was classified as an NPA for more than a year and Arcelor had to clear the loans to become eligible for Essar. Subsequently, it was selected as the preferred bidder by the committee of creditors for Essar and its resolution plan has been filed with the National Company Law Tribunal for approval, where it is pitted against a competing bid by the promoter group.
At one point, JSW was in the fray for Essar. It had joined the race in the second round of bidding, as an investor in a step-down subsidiary of Numetal. However, the Supreme Court ruling which gave both Numetal and Arcelor time to clear dues of defaulting firms to become eligible for Essar, put Numetal out of the race and, in turn, JSW, too.