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Russia's VTB likely to seek solo bid for debt-laden Essar Steel in court

But whether VTB will clear Essar's dues and make a pitch to take it out of bankruptcy is also not clear

Ishita Ayan Dutt  |  Kolkata 

VTB

Russia's VTB, the majority partner in Numetal, may file an independent application in the for a solo bid for Steel, said people close to the development.

The in its judgment on October 4 had granted an opportunity to and Numetal to clear dues for non-performing assets (NPAs) in two weeks to be eligible to bid for Steel. The court had exercised its extraordinary power under Article 142 of the Constitution for the purpose.

While for Arcelor, the dues on account of and KSS Petron would be around Rs 70 billion, for Numetal the payment could be upwards of Rs 390 billion on account of

Moreover, Numetal might have to pay for Ruia group that had been classified as NPAs for more than a year before the submission of resolution plan.

People in the know indicated that since the apex court had not found to be ineligible, it was discussing with lawyers the option of moving an application seeking permission for a solo bid.

Bidding war

  • Payment for Numetal could be upwards of ~390 billion on account of Essar Steel
  • Firm may have to pay for Ruia group firms classified as NPAs for more than a year, before submission of resolution plan
  • Final call on filing independent application for solo bid yet to be taken

But whether VTB will clear Essar’s dues and make a pitch to take it out of bankruptcy is also not clear, though some lawyers indicated the resolution process would have to be closed.

A final call on whether VTB will go ahead with the option of filing an independent application for a solo bid, however, was yet to be taken, the people added. The will take a break for Dussehra shortly, and by the time it reopens, the 14-day deadline would have ended. Therefore, VTB will have to take a call soon, the people said.

head had said after the Supreme Court judgment: "Our goal remains the same." Lawyers were studying the Supreme Court decision, he had added.

If VTB makes a pitch for a solo bid, it is likely that — which was an investor in the operating company of Numetal in the second bid for Essar — will also go alone.

JSW Steel's Joint Managing Director and Group Chief Financial Officer Seshagiri Rao told media persons during the International Conference on Minerals and Metals that was seeking legal opinion on whether it could bid solo if fresh bids were allowed.

JSW Steel had earlier, too, wanted to go solo. However, the committee of creditors for Essar had not allowed it.

Meanwhile, lenders said the lead had started collecting information on Essar dues from other lenders in the consortium. A core group had met last Friday to discuss the Supreme Court judgment.

Apart from Numetal and Arcelor, Vedanta is also a resolution applicant in the second bid. In the second round, the offers are: Arcelor's revised bid stands at Rs 420 billion, Numetal has proposed to match it and Vedanta has offered Rs 350 billion.

First Published: Wed, October 10 2018. 05:33 IST
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