Bankers demand more from ArcelorMittal for full control of Essar

Bankers are demanding a few thousand crores over ArcelorMittal's offer of Rs 35,000 crore to transfer full control of debt-laden Essar Steel to the London-based firm. A meeting with bankers and the Luxembourg based steel company was inconclusive till midnight and was yet to put to vote. The 14 month battle for the 10 million tonne steel plant is in its last lap with a late night meeting called by bankers on Monday in which the committee of creditors are likely to electronically vote their preference based on the final offer from the world's largest steel company. But the vote did not take place as bankers demanded more money from ArcelorMittal. Arcelor offered to pay Rs 35,000 crore cash but bankers want more. ArcelorMittal may also agree to infuse an additional amount to purchase the Odisha Slurry Pipeline Infrastructure which is a separate subsidiary of Essar Steel used to transfer iron ore from mines in Odisha to the Paradip Port from where it is take to the Hazira-based Essar plant in Gujarat. ArcelorMittal’s offer has so far been given preference over by metals and mining conglomerate Vedanta Group who had offered to pay just a shade lower than Rs 35,000 crore upfront in cash. It gives steel magnate Lakshmi Mittal a most sought after footing in the growing Indian market after previous failed attempts since 2005 to set up a greenfield facility in Jharkhand and Karnataka. Mittal has also paid Rs 7649 crore of dues owed by Uttam Galva, a company in which Arcelor Mittal held 29% stake and KSS Petron in which he had invested in his personal capacity in order to qualify as a bidder for Essar Steel. ArcelorMittal was declared as the highest or H1 bidder by bankers making it eligible to have direct negotiations with banks for Essar Steel. ArcelorMittal was mainly selected for its track record and experience in managing steel companies successfully for years, according to the Indian Banks’ Association (IBA) criteria applied by banks.