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ArcelorMittal must clear dues to bid for Essar Steel India; Numetal bid valid

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ArcelorMittal must clear dues to bid for Essar Steel India; Numetal bid valid

The National Company Law Appellate Tribunal ruled that ArcelorMittal's bid for bankrupt Essar Steel India Ltd. is eligible if it clears all outstanding dues of two defaulting companies by Sept. 11 and ruled that Numetal is also eligible to bid.

The required dues of Uttam Galva Steels Ltd. and KSS Petron amount to more than 70 billion Indian rupees, while ArcelorMittal previously said it had exited Uttam Galva before bidding for Essar Steel, according to a Sept. 7 Mint report.

Under India's bankruptcy laws, owners of insolvent companies are not allowed to bid for other companies. In April, ArcelorMittal challenged the validity of Numetal's bid on similar grounds as it included a company controlled by the family of Essar Steel's founder at the time of initial bids.

The tribunal also ruled that Russia's VTB Capital-backed Numetal's second bid was valid and asked the committee of creditors to consider both bids after ArcelorMittal makes the payment. A committee meeting is anticipated next week.

Vedanta Resources PLC also joined the second round of bidding, according to an anonymous source cited in the report, and the committee may consider all three plans in its final decision.

ArcelorMittal recently secured an agreement with Italian steel unions in its bid to acquire Ilva International SpA.

As of Sept. 6, US$1 was equivalent to 72.02 Indian rupees.