Will Ruias challenge insolvency proceedings if Numetal gets disqualified?

Will Ruias challenge insolvency proceedings if Numetal gets disqualified?

After six months long painstaking insolvency proceedings and due diligences, the Rs 43,000 crore debtor Essar Steel has received just two bids--- from ArcelorMittal and Numetal Mauritius--- on Monday.

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Nevin John
  • Feb 13, 2018,
  • Updated Feb 13, 2018 6:39 PM IST

After six months long painstaking insolvency proceedings and due diligences, the Rs 43,000 crore debtor Essar Steel has received just two bids--- from ArcelorMittal and Numetal Mauritius--- on Monday. Though ArcelorMittal did due diligence for Bhushan and Essar, it reserved its final bid for the latter, pushing the industry to guess that it's a sizable offer. The bid of Numetal is going to be the game changer as it is the last attempt of the Ruia family, the promoters of Essar group companies, to win back their flagship company.

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Numetal is a consortium, fronting the interests of Ruias, in which Russian bank VTB holds the majority stake. Rewant Ruia, the son of co-founder Ravi Ruia, holds a minority stake in the consortium. The bids will open on Wednesday. But announcing just the name of the lead bidder will not be the end of this corporate drama. There's expected to be a lot of twists and turns in the battle for Essar Steel.

The surprise in the insolvency proceedings was the lesser number of bids, even for large assets like Essar and Bhushan Steel. India's oldest steelmaker Tata Steel did the due diligence for at least four major steel assets, but ended up as the second largest bidder in three stressed assets--- Bhushan Steel, Bhushan Power and Steel and Electrosteel Steels. They didn't submit the bid for Essar. It came second after Vedanta of Anil Agarwal in the bid for Electrosteel. Sajjan Jinda's JSW Steel has emerged as the lead bidder for Monnet Ispat and both the Bhushan companies.

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Vedanta was one of the potential bidders for the Essar and Bhushan companies, but they refrained from putting in the bid. Foreign players Nippon Steel and Posco were also there in the initial phase.

Is it the fear of losing the bid that's forced the large players from backing out of the bid process? "There would be many other reasons, including going against the interest of rival corporate houses," says an expert in the market.  More will unfold in the days to come.        

After six months long painstaking insolvency proceedings and due diligences, the Rs 43,000 crore debtor Essar Steel has received just two bids--- from ArcelorMittal and Numetal Mauritius--- on Monday. Though ArcelorMittal did due diligence for Bhushan and Essar, it reserved its final bid for the latter, pushing the industry to guess that it's a sizable offer. The bid of Numetal is going to be the game changer as it is the last attempt of the Ruia family, the promoters of Essar group companies, to win back their flagship company.

Advertisement

Numetal is a consortium, fronting the interests of Ruias, in which Russian bank VTB holds the majority stake. Rewant Ruia, the son of co-founder Ravi Ruia, holds a minority stake in the consortium. The bids will open on Wednesday. But announcing just the name of the lead bidder will not be the end of this corporate drama. There's expected to be a lot of twists and turns in the battle for Essar Steel.

The surprise in the insolvency proceedings was the lesser number of bids, even for large assets like Essar and Bhushan Steel. India's oldest steelmaker Tata Steel did the due diligence for at least four major steel assets, but ended up as the second largest bidder in three stressed assets--- Bhushan Steel, Bhushan Power and Steel and Electrosteel Steels. They didn't submit the bid for Essar. It came second after Vedanta of Anil Agarwal in the bid for Electrosteel. Sajjan Jinda's JSW Steel has emerged as the lead bidder for Monnet Ispat and both the Bhushan companies.

Advertisement

Vedanta was one of the potential bidders for the Essar and Bhushan companies, but they refrained from putting in the bid. Foreign players Nippon Steel and Posco were also there in the initial phase.

Is it the fear of losing the bid that's forced the large players from backing out of the bid process? "There would be many other reasons, including going against the interest of rival corporate houses," says an expert in the market.  More will unfold in the days to come.        

Read more!
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