Lenders reject bids by Numetal, ArcelorMittal for Essar Steel

MUMBAI:The State Bank-led consortium of lenders to Essar Steel on Wednesday rejected the bids by both Numetal and ArcelorMittal after finding them ineligible under the amended Insolvency & Bankruptcy Code that debars related parties from bidding.

Mumbai, March 21

The State Bank-led consortium of lenders to Essar Steel on Wednesday rejected the bids by both Numetal and ArcelorMittal after finding them ineligible under the amended Insolvency & Bankruptcy Code that debars related parties from bidding.

The decision was taken at a meeting of the Essar Steel’s committee of creditors (CoC) here on Wednesday.

“The (Numetal and ArcelorMittal) bids were found to be ineligible under Section 29A of the IBC. They did not fall under the satisfactory criterion that the promoters’ link should not be there or connected persons should not be there,” a banking source said.

While ArcelorMittal India has been found ineligible for its joint venture with Uttam Galva, which is at the NCLT awaiting resolution, Numetal’s bid was done in by the fact that one of the promoters of the special purpose vehicle is Rewant Ruia, the son of Essar Group promoter Ravi Ruia, who is one of the original promoters of Essar Steel.

Lenders have also set an April 2 deadline for the second round of bidding Essar Steel that owes over Rs 45,000 crore to over 30 bankers.

Bankers said if both the companies delink their connection from the promoters or standardise the loans they can bid again. — PTI

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The company said it apprehends that “full facts submitted by Numetal for determination of its eligibility to submit a Resolution Plan have not been appropriately assessed”.