Top global players including Tata Steel, Essar Group and Arcelor Mittal are learnt to have submitted bids to acquire debt-laden Essar Steel which is going through the insolvency resolution process.
Essar Steel India Ltd, an integrated steel producer with an installed capacity of 10 million tonne per annum (MTPA) is undergoing Corporate Insolvency Resolution Process (CIRP) under the provisions of Insolvency and Bankruptcy Code. The expression of interest (EoI) for the company was invited by October 23.
"Essar Group has submitted EoI for Essar Steel. A resolution plan will be submitted to IRP within the scheduled time frame," an Essar Group Spokesperson said.
Asked about the rationale for bidding, the spokesperson said IBC allows promoters to bid for their company at the NCLT and there are no limitations.
He added that the entire process is on purely commercial basis and the final selection is done based on the highest bid offered for the NCLT company.
"This practice of promoters being permitted to bid in bankruptcy/insolvency cases is prevalent in the US, UK and many developed and developing countries," the spokesperson said.
Meanwhile, a source said: "Essar Group, participating in the bid has submitted EoI for Essar Steel along with a letter of comfort from Russia's VTB capital which is a financial services company. It is the investment arm of the VTB group.
A global financial services provider, the VTB group comprises over 20 credit institutions and financial companies operating across all key areas of the financial markets.
The group operates a large international network and the majority shareholder of the VTB Bank is the Russian government, which owns 60.9 per cent of the voting shares.
