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The Silicon Review Asia

ArcelorMittal wins the Rs 42,000 crore bid to purchase Essar Steel

ArcelorMittal wins the Rs 42,000 crore bid to purchase Essar Steel

According to a recent statement made by Japan’s Nippon Steel, ArcelorMitttal SA and Sumitomo Metal Corp have been selected by Essar Steel India Ltd. as the winning bidders for the asset for a price of $5.7 billion, i.e., Rs 42,000 crore. While ArcelorMittal would claim a larger part of the stake, Nippon Steel would still be left with almost an equal stake. “The acquisition will be implemented subject to the approvals of Indian National Company Law Tribunal and other relevant authorities”, said Nippon Steel.

Essar Steel also grabbed interest of JSW Steel, Vedanta Ltd and international companies and banks like Russia’s VTB and ArcelorMittal. Essar Steel made this move as a way to save itself from bankruptcy. The company had to pay $7.4 billion to creditors to settle its claims.

Essar’s founders have made attempts to hold on to the company through a minority stake in VTB-led consortium Numetal and later through an independent offer. The brawl between Numetal and ArcelorMittal had to be taken to the Supreme Court, resulting in the rule that enables bidders to make further bids for the steel plant only if they have settled their dues related to any distressed assets they were associated with.

Arcelor Mittal said that the dues of Uttam Galva and KSS Petron have all been settled indicating that it can now acquire the Essar Steel asset. The company also mentioned that it wishes to continue the process in complete accordance to the terms set by the new Indian Bankruptcy Code.

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