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ArcelorMittal, Russia's VTB Group bid for Essar Steel

Press Trust of India  |  New Delhi 

and a consortium led by Russia's today submitted bids to takeover under an insolvency process, but Vedanta Resources, and shunned the bidding that may have touched Rs 35,000-40,000 crore.

While ArcerlorMittal may take along Nippon & Sumitomo Metal Corp for the takeover, VTB used a Mauritius- based investment vehicle Numetal, where Rewant Ruia - Essar Group promoter Ravi Ruia's son - held 25 per cent stake.

VTB has 40 per cent interest in Numetal while the reamining is with private equity funds.

Sources said both, Pvt Ltd, and deposited Rs 500 crore in the escrow account to convey their interest in

Sources said though initially showing interest, Vedanta did not bid after it made the highest bid for bankrupt Steels.

The company owns a ore mine in where value addition was a condition. helped it meet the condition and so it did not bid for Essar Steel, they said.

and too did not put in the bid at the close of bidding today.

Confirming the bid, Luxemburg-based said its subsidiary Pvt Ltd (AMIPL) submitted an offer together with a detailed investment plan to address operational issues in Essar's existing asset base.

"In its offer, AMIPL set out a detailed industrial plan for Essar aimed at improving its performance and profitability and ensuring it can participate in the anticipated growth of in India," the company said in a statement.

It also highlights the extensive experience and track record of the group in the successful acquisition and integration of under-performing assets, which AMIPL believes would be of considerable value to Essar," it said.

Essar would also have access to the deep bench of technical expertise and knowledge from across the group which is unparallelled in the steel industry, it added.

Founded by Shashi and Ravi Ruia, was referred to the last year after accumulating nearly Rs 50,000 crore in debts.

Essar Steel is an Its main production facility is in It has a nameplate crude steel capacity of 9.6 million tonnes per annum, although the current maximum is 6.1 million tonnes per annum, due to a bottleneck in the steelmaking and casting process.

Essar Steel was among the initial 12 companies identified by the Reserve (RBI) for insolvency proceedings.

Besides Essar Steel, ArcelorMittal had also shown interest in other like and Bhushan Power & Steel, which are also being auctioned.

Lakshmi Mittal, Chairman and CEO, ArcelorMittal, said Essar provides a compelling opportunity for ArcelorMittal to enter the high growth Indian The offer submitted today by AMIPL includes a detailed investment plan to address operational issues in Essar's existing asset base.

"With our industry expertise and renowned operating prowess, we believe we are uniquely equipped to implement a successful turnaround which would be beneficial to Essars stakeholders," he said.

Aditya Mittal, ArcelorMittal Europe, said: "This opportunity aligns with the group's strategy of selectively investing in attractive projects to maximise long-term shareholder value. We believe our technical experience and management know-how, gained from many successful acquisitions and integrations, will ensure success for the various steel and pelletising operations at Essar."

Led by SBI, lenders in June this year had decided to begin insolvency proceedings against Bhushan Steel, Essar Steel and Steels by referring them to the (NCLT) for recovery under IBC.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, February 12 2018. 21:25 IST