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Creditors pushing to sell debt-laden Indian steelmakers

Creditors of insolvent Indian companies are seeking approval from the country's new bankruptcy court to sell the assets of as many as 40 companies, including steel producers, Bloomberg News reported Dec. 19.

The list includes steelmakers Essar Steel India Ltd., Bhushan Steel Ltd., Monnet Ispat & Energy Ltd. and Electrosteel Steels Ltd., which owe more than US$26 billion in combined debt.

Several parties submitted expressions of interest for the Indian mills, and some have already submitted bids for a series of deals with deadlines around year-end, according to anonymous sources.

Vedanta Resources Plc unit Vedanta Ltd. and ArcelorMittal are competing to acquire Essar Steel, with VTB Capital also named as a potential suitor.

Tata Steel Ltd. and JSW Steel Ltd. are also reportedly assessing the debt-laden assets.

A spokesperson for ArcelorMittal was quoted as saying that "members of our management team are conducting due diligence on steel assets available through the current insolvency process."

"As a process, we do assess and evaluate various strategic opportunities for growth," said a spokesperson for Tata Steel, which could become India's top steel producer if it acquires Essar Steel.

Bhushan Steel reportedly drew interest from Apollo Global Management-backed Aion Capital Partners Ltd. and from Japan's Nippon Steel & Sumitomo Metal Corp. and JSW Steel.

Meanwhile, Aion Capital and JSW Steel are the only buyers competing for Monnet in the second round of bidding, and lenders are expected to agree on a sale shortly.

Steel Authority of India Ltd., Vedanta and Tata Steel are also among the suitors for Electrosteel.