DNA Money Edit: Steeling for a bidding war

The entry of Anil Agarwal-owned Vedanta and JSW Steel in the race for Essar Steel’s assets could see an intensely fought bidding war under the Insolvency and Bankruptcy code (IBC). While there are many players on the battleground, it is likely to be mainly a face-off between JSW Steel and Lakshmi Narayan Mittal’s ArcelorMittal.

After losing the Bhushan Steel and Bhushan Power & Steel bid to Tata Steel, JSW Steel is displaying aggression in snapping up Eassar Steel. After the committee of creditors (CoC) declined to entertain its independent bid as it had not submitted expression of interest, it has taken the investor route through Nu Metal Steel India Pvt Ltd’s bid. JSW has repeatedly claimed funds would be least of its worries.

Mittal is also leaving no stone unturned in chasing the Ruais-promoted steel firm. Going by his recent statements, it would not be surprising if his bid tops Essar’s debt of around Rs 44,000 crore. In this three-way war between Numetal-JSW, ArcelorMIttal-Nippon and Vedanta, Agarwal’s steel company is widely being seen as a not-so-serious bidder. One of the reasons could be that he has already won Electrosteels Steel.

The steely resolve to go after steel assets could be driven by the positive outlook for growth in crude and finished steel production.