Billionaire Anil Agarwal-owned Vedanta has emerged as the highest bidder for Electrosteel Steels. The globally diversified natural resources company, Vedanta was issued letter of intent as successful resolution applicant by the committee of creditors for acquisition of the stressed asset of Electrosteel which was put under the Corporate Insolvency Resolution Process of the Insolvency and Bankruptcy Code, 2016, to recover the defaulted amount.
Vedanta has accepted the terms of the LoI. The closure of the transaction will be subject to compliance with the applicable regulatory requirements and according to the final terms approved by the National Company Law Tribunal, Vedanta said in a statement on Saturday.
Vedanta has offered to pay a little over ₹5,000 crore for the distressed asset out on the block to recover ₹11,000 crore it had defaulted to lenders.
The highest bidder was selected by the committee of creditors through a scoring system combining various parameters.
Renaissance files suit
Tata Steel, Vedanta and Abhishek Dalmia-led Renaissance Steel India were the only contenders for Electrosteel. Renaissance Steel had filed two separate petitions in the Kolkata Bench of the National Company Law Tribunal claiming that Vedanta and Tata Steel are ineligible to bid under the Insolvency and Bankruptcy Code. However, this petition was rejected by NCLT. Possibility of Renaissance moving the National Company Law Appellate Tribunal is not ruled out.
Renaissance has claimed that Vedanta and Tata Steel have been found guilty of criminal offences that are punishable with two or more years in jail.
Under Section 29A of the IBC, companies or individuals convicted of such offences are barred from bidding for stressed assets.
Renaissance claimed that Tata Steel UK, a unit of the Indian steel-maker, had pleaded guilty of violating the UK Health and Safety at Work Act. The UK subsidiary faced multiple probes and was convicted each time. Though the offences were punishable with two years in jail, the UK authorities chose to impose fines, it claimed.
Similarly, it said Vedanta Resources Plc, holding company of Vedanta, had violated pollution norms in Zambia. Vedanta Resources-controlled Konkola Copper Mines had, in 2010, pleaded guilty to four charges brought against it by the Zambian authorities for violation of pollution norms. Some of these offences were punishable with three years in jail, it said.