Will Essar Steel go Bhushan way?

An intense battle is likely to break out for the debt-ridden Essar Steel if the second round of bids are allowed to be opened.

The National Company Law Appellate Tribunal (NCLAT) is expected to hear Numetal and ArcelorMittal today.  Numetal had last week disclosed its Rs 37,000-crore bid to NCLAT. ArcelorMittal was the highest bidder in the first round with Rs 32,000 crore offer.

This, banking and legal experts said, could also lower the haircut to be taken by the lenders in the steel giant’s Rs 49,000 crore debt.

“If the NCLAT allows the opening of the second bid, then we will have to see who is the highest bidder. It could be any one of them (ArcelorMittal, Vedanta or Numetal). What will then happen is there will be counter bidding by others. It is going to be a fiercely fought battle. There is a high possibility of bidders taking the bid to Rs 42,000-44,000 crore,” said an legal expert.   

An industry source said that now that ArcelorMittal has made itself eligible by paying Uttam Galva dues, it could be called in for fresh bidding.

An industry source associated with one of the bids, said Vedanta was the most resourceful bidder and was keen to acquire one more steel asset after Electrosteel.

“These are the only two plants (Bhushan Steel and Essar Steel), where they can recover most of their money. They might not get this kind of money for other assets. None of them is as attractive. For Bhushan, they have got 72% of their money. The second one could be Essar Steel,” he said.

A lawyer who works for a firm engaged in the resolution process  said the recovery in Essar Steel could be higher than 85%.