The race to acquire Essar Steel will start all over again with new players, including JSW Steel, evincing interest in bidding for the company. This follows a decision by the Committee of Creditors of Essar Steel to reject the bids placed by Numetal (backed by Russia’s largest bank VTB) and ArcelorMittal, the world’s largest steel company, on grounds that their proposals did not comply with the Insolvency and Bankruptcy Code.

At a meeting held here on Wednesday, the creditors decided to call for fresh bids, which could further delay the entire process of finding a suitor for the company. Essar Steel has defaulted on a ₹48,000-crore loan.

Both Numetal and ArcelorMittal can participate in the rebidding after addressing the concerns raised by the lenders.

Numetal moves NCLT

Numetal has filed an application before the NCLT, Ahmedabad, stressing that it would, if need be, ease out Rewant Ruia, son of Essar promoter Ravi Ruia, from the consortium that has placed a bid for Essar Steel. Rewant’s presence in Numetal as a shareholder was the primary reason for the lenders to reject the bid.

Numetal said that full facts related to its eligibility have not been appropriately assessed. “Accordingly, all necessary facts for determining the eligibility of Numetal have been placed before the NCLT for an objective assessment,” it said.

ArcelorMittal said it has not received any official communication from the creditors on its bid being rejected. It partnered Nippon Steel & Sumitomo Metal Corp to bid for Essar Steel but the company’s earlier stake in debt-laden Uttam Galva proved to be a spoiler.

Creditors to meet tomorrow

Sources said the creditors will meet on Friday and decide on whether to restrict fresh bidding to companies that had earlier submitted an Expression of Interest but did not place financial bids or open it up to all interested parties.

It is unlikely that Tata Steel and Vedanta will rejoin the bidding though they had evinced interest earlier. While Tata Steel has acquired Bhushan Steel, Vedanta is the top bidder for Electrosteel, and, therefore, the two may not have the appetite for more assets.

JSW Steel is yet to taste success in the ongoing asset-sale process and will join the race for Essar on its own or through a tie-up with PEs that had expressed interest earlier.

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