Ahead of the Supreme Court's October 18 deadline to ArcelorMittal and Numetal to clear off their NPA dues in order to remain eligible to bid for Essar Steel, the former is in deal-making mode. Citing people close to the development, the Business Standard reported that on October 11, steel tycoon Lakshmi Mittal-led ArcelorMittal offered to pay Rs 4,500 crore towards servicing the outstanding debt of the two defaulting firms it was previously associated with.
The amount calculated for Uttam Galva is Rs 3,987 crore and Rs 567 crore for KSS Petron, however this does not include the penal interest or other charges. Also, the calculations are based on the loan, including interest, till February 7 for Uttam Galva and February 9 for KSS Petron. That's because on the above dates Mittal's companies ceased to be promoters of the two entities having sold their stakes, shortly before his play for Essar Steel.
The sources said the company's negotiation over the final amount payable was still ongoing with the Committee of Creditors of the beleaguered company, and likely to end tonight. In any case, the final offer is subject to approval of ArcelorMittal's board. In May, when the CoC had demanded a "no dues" certificate from ArcelorMittal in line with the National Company Law Tribunal's (NCLT) order, the steelmaker had parked Rs 7,000 crore in an escrow account to that end but had made it a conditional deal, subject to bagging Essar Steel.
Sources told the daily that banks had then indicated an immediate payment of Rs 5,500 crore on account of Uttam Galva and Rs 1,500 crore to be paid over three years. For KSS Petron, the payout was to be Rs 1,000 crore. These amounts are likely to have increased now, they added. However, all of the debt may not be paid in one go.
In September, following the National Company Law Appellate Tribunal (NCLAT) order, which had directed ArcelorMittal to pay dues within three days, the company indicated a revised proposal of Rs 49,000 crore to Essar Steel's CoC. This included an upfront payment of Rs 42,000 crore towards the resolution of the debt of steel company under the hammer and a commitment to settle the overdue amounts of the two defaulting companies.
Numetal, the other leading contender for Essar Steel, on the other hand, might have to clear the Ruia group companies' loans in line with the Supreme Court's order. The latter had been classified as NPAs for more than a year before the submission of its resolution plan. However, it is not clear whether it has initiated any discussion with the lenders on paying these dues. In May, the sum of the principal and interest for Numetal, on account of Essar Steel, reportedly worked out to Rs 37,558 crore while penal interest and other charges stood at Rs 1,685 crore.
Meanwhile, although the apex court has granted the CoC a final eight-week window to finalise a bid, the race for Essar Steel seems to be widening. According to the daily, Russia's VTB Capital, which was backing Numetal, has moved an application in the Supreme Court seeking permission to bid independently for Essar Steel. JSW Steel, which had bought out Rewant Ruia's contentious 25% stake in Numetal ahead of the second round of bidding, is reportedly seeking legal opinion on going solo, too. Anil-Agarwal promoted Vedanta has also thrown its hat in the ring.
Edited by Sushmita Choudhury Agarwal
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