The world's largest steel maker ArcelorMittal on Friday said it has been chosen by the lenders to takeover debt-laden Essar Steel India Ltd for about Rs 42,000 crore.
The world's largest steel maker ArcelorMittal on Friday said it has been chosen by the lenders to takeover debt-laden Essar Steel India Ltd for about Rs 42,000 crore.
In a statement, ArcelorMittal said its resolution plan for Essar Steel, which the lenders auctioned to recover over Rs 49,000 crore of unpaid loans, includes "an upfront payment of
Rs 42,000 crore" to settle debt and "a further Rs 8,000 crore of capital injection into the company to support operational improvement, increase production levels and deliver enhanced levels of profitability".
The Committee of Creditors have issued ArcelorMittal and its partner Japan's Nippon Steel & Sumitomo Metal Corp a Letter of Intent (LoI) declaring them as the "successful applicant".
The development comes a day after promoters of Essar Steel offered to pay lenders Rs 54,389 crore, including Rs 47,507 crore upfront cash payment to clear all dues of lenders, and pull out the firm from insolvency proceedings.
Earlier, in a last-ditch effort to retain control over the company, promoters Ruia family Thursday offered to pay lenders of Essar Steel Rs 54,389 crore including Rs 47,507 crore upfront cash payment to clear all dues and pull out the firm from insolvency proceedings.
The offer is better than Rs 42,202 crore offered by the world's largest steel producer ArcelorMittal to take over Essar Steel, which lenders are auctioning to recover their unpaid dues of over Rs 49,000 crore.
"The shareholders of Essar Steel have today (Thursday) submitted a proposal to the Committee of Creditors (CoC) for full settlement of the entire admitted claims of the financial creditors, operational creditors, and workmen and employees of Essar Steel India Ltd (ESIL), aggregating Rs 54,389 crore, under Section 12A of the Insolvency and Bankruptcy Code," the company said in a statement.
While the company did not share where it was raising the money from, sources said the promoters have already arranged for an upfront cash payment to save the biggest mill being sold under the new insolvency process.
Ruias offered to pay financial creditors a total of Rs 49,395 crore to clear all their outstanding dues till date. Besides operational creditors have been offered Rs 4,976 crore and employees another Rs 18 crore to clear all their dues.
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 "ArcelorMittal wins bids to buyout Essar Steel")
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