Anil Agarwal group-owned Vedanta today said it has won the bid to acquire bankrupt Electrosteel Steels Ltd in an insolvency auction.
"Vedanta Limited hereby informs that it has been declared as the successful resolution applicant by the committee of creditors (CoC) for Electrosteel Steels Ltd under the Corporate Insolvency Resolution Process of the Insolvency and Bankruptcy Code, 2016 and has received a Letter of Intent (LoI) today," the company said in a BSE filing.
Vedanta said it has accepted the terms of the LoI. The closure of the transaction will be subject to compliance with applicable regulatory requirements and as per the final terms approved by the National Company Law Tribunal, it added.
The Reserve Bank of India had named Electrosteel Steels among the first 12 large corporate accounts that were identified for insolvency resolution in June last year. The compnay has a debt of more than Rs 13,000 crore, as per the information on its website. Out of this, it owes around Rs 5,000 crore to State Bank of India alone. It owes Rs 191.6 crore to operational creditors, the resolution professional had acknowledged.
Vedanta got a sweet deal out of this acquisition as one of Electrosteel Steels' assets in Jharkhand is close to Vedanta's iron ore mines there. The entry into steel was aimed at converting iron ore from its mine as it is more profitable, he'd added.
Vedanta had reportedly became the highest bidder after quoting Rs 4,500 crore for the Electrosteel steels. In tow was Tata Steel with a bid of Rs 3,500 crore. Apart from them, Renaissance Group and Edelweiss Asset Reconstruction Company Ltd. had also submitted bids.