ArcelorMittal offers Rs 800 crore upfront to Indian Steel lenders

ArcelorMittal India, promoted by Lakshmi Mittal, the favorite to acquire bankrupt Indian Steel Corporation, has offered an upfront payment of ₹800 crore to lenders, people familiar with the matter have said.

Indian Steel Corporation lenders have already started voting on resolution plans proposed by AM Mining, a company linked to ArcelorMittal, and Khandwala Finstock, the sources said. Voting will close on May 10, one of the people said. Indian Steel Corporation, a company owned by former promoters of Ruchi Soya Group, was admitted to insolvency proceedings last October by the National Company Law Tribunal.

Almost all lenders will favor ArcelorMittal’s plan since its offer is upfront and superior to that of Khandwala Finstock, the people said. ArcelorMittal’s offer of ₹800 crore would imply a recovery of almost 30% of the claim amount for the lenders. Khandwala Finstock’s bid is much lower and spread over a few years, the people said, without further details.

ArcelorMittal declined to comment, while Indian Steel Corporation resolution professional Ajay Joshi did not respond to a request for comment. Jindal Steel & Power and Metro Global, promoted by Naveen Jindal, had also expressed interest in the steel company, but did not submit a firm offer.

The NCLT admitted Indian Steel last October at the request of India Resurgence Asset Reconstruction Company, which is backed by Bain Capital and Piramal Enterprises. The resolution professional admitted ₹2,709 crore in claims from financial creditors. India Resurgence ARC owns 72% or ₹1,945 crore of this debt. ARC has acquired the debt from various banks over the past three years.

In May 2019, the largest lender, State Bank of India, sold its ₹929 crore debt to India Resurgence ARC for ₹362 crore. Punjab National Bank holds 20% of the debt and Jammu & Kashmir Bank holds 6%, while the balance is held by IDBI Bank and Union Bank of India, according to the company’s website.


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