Indian Steelmaker's $6 Billion Sale Is Said to Face Delay
A committee of Essar Steel creditors has postponed a meeting to discuss the offers, according to the people.
(Bloomberg) -- Essar Steel India Ltd.’s sale is facing a fresh delay, after creditors of the insolvent firm pushed back a decision on bids from ArcelorMittal and a consortium backed by VTB Group, people with knowledge of the matter said.
A committee of Essar Steel creditors, originally slated to convene earlier this week, has postponed a meeting to discuss the offers, according to the people. The interim resolution professional overseeing the sale has asked Essar Steel lenders to provide further clarity on issues relating to the bidders’ eligibility, the people said, asking not to be identified because the information is private.
Information being sought includes details of any past defaults by the bidders and their associates, one of the people said. ArcelorMittal and a separate investor group backed by Russia’s state-controlled VTB were the only bidders for Essar Steel, which could fetch a valuation of at least $6 billion in a sale, people with knowledge of the matter said in February.
Advisers evaluating the offers had recommended all the bids be disqualified, Bloomberg News reported last month. They expressed concerns about ArcelorMittal’s eligibility because it had held a stake in Uttam Galva Steels Ltd., which is classified as a delinquent borrower, people with knowledge of the matter said at the time. The VTB investor group was also considered ineligible because its backers include the son of a billionaire Essar Steel founder, according to the people.
A representative for State Bank of India, which is among the biggest Essar Steel creditors, didn’t immediately respond to an email and phone call seeking comment. A representative for the resolution professional, Alvarez & Marsal India Pvt, didn’t immediately respond to an email seeking comment.
Luxembourg-based ArcelorMittal is partnering with Nippon Steel & Sumitomo Metal Corp., Japan’s top mill, on the bid for the Indian producer, according to a statement last week.
Representatives for ArcelorMittal and Numetal, the investment vehicle set up by the VTB consortium, didn’t immediately respond to requests for comment.
--With assistance from Swansy Afonso
To contact the reporters on this story: George Smith Alexander in Mumbai at galexander11@bloomberg.net, Anto Antony in Mumbai at aantony1@bloomberg.net.
To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Marcus Wright at mwright115@bloomberg.net, Timothy Sifert, Jason Rogers
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