The co, which did not bid in first round, now exploring all routes to acquire debt-laden firm
JSW Steel, which lost out to Tata Steel in the bidding war for Bhushan Steel and Bhushan Power and Steel, has developed a keen interest in participating in the bidding under the Insolvency and Bankruptcy Code (IBC) for Essar Steel even though it did not submit expression of India (EoI) in the first round of bidding, a source in the know told DNA Money.
The source said the Sajjan Jindal-owned steel firm is looking at exploring all routes to acquire Essar Steel, whose total debt stood at Rs 45,000 crore.
On Wednesday, a consortium of lenders rejected bids by ArcelorMittal and Numetal, a special purpose vehicle (SPV) created by Russia’s VTB Bank and Aurora Trust, which is partially owned by Rewant Ruia, son of Essar Group promoter Ravi Ruia.
The State Bank of India-led committee of creditors (CoC) found bids by both firms ineligible under Section 29A of the amended IBC, which does not permit companies with links to defaulting promoters to bid for the asset put on the block for resolution of non-performing assets (NPAs).
The industry source, who did not want to be named, said JSW had sent a letter to resolution professional Satish Gupta last week. In it, the steel firm had evinced interest in bidding for the Hazira-based steel firm.
“Three-four months back, JSW Steel had not submitted expression of interest for Essar Steel because at that time it was not interested. It was only interested in Bhushan Steel, Bhushan Power and Steel and other assets (Monnet Ispat). But it is now interested (in Essar Steel) because it did not get Bhushan Steel and Power assets. It could only acquire Monnet Ispat. So now, it is waiting for the CoC’s decision on whether fresh EoI would be accepted or not for the second round of bidding,” said the source.
The deadline for the second round of bidding for Essar Steel is April 2.
According to the source, the SBI-led CoC was split on the issue and is expected to come out with a decision by today. The source said whatever the decision, JSW would go all out to snap up Essar Steel.
“If the CoC allows new EoI, then JSW will submit its bid independently but if it (CoC) takes an adverse view, then it (JSW) will form a consortium with other bidders and tag along with them to bid,” said the source.
Firms like Vedanta and some private equity firms have submitted their EoI for Essar Steel but had not put in their final bids in the first round of bidding.
“It is still not clear with whom JSW will form the consortium. That will be decided after the CoC decision. I am assuming that it (bidding) will be open for all and JSW can come in as an independent bidder. But if they (CoC) say only those bidders (who have submitted their EoI earlier) can come in then JSW will be ineligible to bid on its own and will have to go with others,” said the source.
Queries sent by DNA Money through email to JSW Steel remained unanswered.
The steel firm, which produces 18 million tonnes of alloy per annum, was the sole bidder for Monnet Ispat at Rs 3,750 crore last month. Monnet’s liabilities include Rs 10,359 crore to financial lenders and Rs 116 crore to operational creditors.
It, however, could not stand up against Tata Steel in the battle for Bhushan Steel, which was taken over by the former with a bid at Rs 35,000 against the JSW’s Rs 29,700 crore.
JSW Steel also lost Bhushan Power and Steel to Tata Steel, which bid Rs 24,500 crore for it. Jindal-promoted steel company’s bid was Rs 13,000 crore.
NEW SUITOR
- It’s waiting for CoC decision on whether fresh EoI will be accepted or not
- If new EoI is not allowed, JSW will form a consortium
- Earlier, it was only interested in Bhushan Steel and other assets
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The State Bank of India-led committee of creditors (CoC) found bids by both firms ineligible under Section 29A of the amended IBC, which does not permit companies with links to defaulting promoters to bid for the asset put on the block for resolution of non-performing assets (NPAs). 
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