Ruias add a Rs 32,000 crore twist to this year's biggest bankruptcy tussle

MUMBAI: Numetal, in which a Ruia family member is part-owner, has increased its offer for Essar Steel by more than 75% to match ArcelorMittal’s superior bid in the first round, said two persons familiar with the matter. In a letter to lenders, Numetal said it would now offer Rs 32,000 crore for the bankrupt steel company, said the persons quoted above.

ArcelorMittal and Numetal are the only two bidders for Essar Steel, which is facing claims of about Rs 49,000 crore. The resolution professional, in charge of running the company, informed the committee of creditors for the first time on Tuesday that LN Mittal-led Arcelor-Mittal had offered Rs 32,000 crore for the steel company while VTB Bank-led Numetal had offered Rs 18,000 crore.

Numetal said in its letter that it will match the offer by ArcelorMittal, and also offered to change its structure to become compliant with Section 29A of the Insolvency and Bankruptcy Code (IBC).


“Numetal told the lenders that Arcelor-Mittal, as the highest bidder, is not eligible and should not be given 30 more days to repay dues of defaulting companies as directed by the bankruptcy court,” said one of the persons quoted above.

Lenders Surprised by Numetal Offer
The 30-day period was applicable only to applicants who had submitted a resolution plan before November 23, 2017, when the IBC was amended to bar defaulters from bidding.

Citing this clause, Numetal has move the National Company Law Appellate Tribunal (NCLAT) appealing against the order by Ahmedabad bench of the bankruptcy court that lenders can give 30 days to ineligible applicants to repay dues of defaulting companies. The matter will be heard on Friday.

Numetal officials did not respond to an email sent by ET.

The resolution professional had declared both ArcelorMittal and Numetal ineligible due to non-compliance with Section 29A of IBC, which bars defaulters from bidding.

Numetal was declared ineligible on the grounds that Rewant Ruia, son of Essar Steel promoter Ravi Ruia, has a 25% stake in it and is thus seen as a person acting in concert with the Ruia family.

ArcelorMittal was found ineligible due to its equity holding in two defaulting companies — KSS Petron and Uttam Galva — at the time of the bid.

Lenders will meet on Friday to consider the bankruptcy court’s order.