New Delhi: Eyeing the debt-laden Essar Steel and Bhushan Steel for acquisition, a delegation from global giant ArcelorMittal visited their plants for due diligence, multiple industry sources said.
The Luxembourg-based ArcelorMittal is among top industry players, including Tata Steel, that have submitted bids to acquire the debt-ridden Essar Steel, which is going through the insolvency resolution process.
Tata Steel has a total domestic capacity of 13 million tonnes per annum (mtpa). To take the matter forward, the ArcelorMittal team visited Essar Steel's facility, the sources said.
"The team, which comprised at least 25 people, visited the plants (Essar Steel and Bhushan Steel) last week for due diligence to analyse various aspects such as legal, finances etc," a person in the know said.
The delegation included ArcelorMittal officials from overseas operations too, said another person who did not wish to be named because of the sensitivity of the matter. They have analysed all factors and will submit the proposal to the resolution professional directly by next month, the sources added.
The companies eyeing Bhushan Steel will also have to submit their resolution proposal by December. While Essar Steel and Bhushan steel declined to comment on the issue, a call to the ArcelorMittal spokesperson did not elicit any reply.
Essar Steel India, an integrated steel producer with an installed capacity of 10 mtpa, is going through insolvency resolution under the provisions of the Insolvency and Bankruptcy Code (IBC). The expression of interest (EoI) for the company was invited by October 23.
"The Essar group has (also) submitted EoI for Essar Steel. A resolution plan will be submitted to IRP within the scheduled timeframe," the Essar Group spokesperson had told PTI.
Asked about the rationale for bidding, the spokesperson has said the IBC allows promoters to bid for their company at the NCLT and there are "no limitations". Bhushan Steel, which was referred to the NCLT by the RBI under the Insolvency and Bankruptcy Code, has reported a lower standalone net loss to Rs 467.37 crore during the September quarter, from Rs 980.22 crore in the same period a year ago.
According to the Bhushan Steel homepage, the company is India's third-largest secondary steel producing firm with an existing production capacity of 5.6 mtpa.