Billionaire Lakshmi Mittal’s ArcelorMittal will challenge the eligibility of the VTB-led Numetal Ltd. group in bidding for Essar Steel India Ltd.
ArcelorMittal will on Wednesday challenge in court the legitimacy of a bid for Essar Steel India Ltd. by a group led by VTB Capital, intensifying the battle for the biggest industry asset yet to be sold under a new bankruptcy law.
Mittal’s steelmaker has several reasons to question the eligibility of the VTB-led Numetal Ltd. group, including that Aurora Enterprises was part of the consortium at the time of an initial round of bidding, Brian Aranha, an executive president at ArcelorMittal, said in an interview in Mumbai. The case will be heard in the company court in Ahmedabad.
Aurora, backed by the son of one of Essar’s founders, has since been bought out of the bidding group by India’s No. 1 producer of the alloy JSW Steel Ltd., according to people familiar with the matter. A representative for Numetal didn’t immediately respond to an email seeking comment.
Essar Lenders Said to Reopen Bidding for $6 Billion Steelmaker
Steelmakers are seeking to expand in India, set to be the second-largest producer this year, as economic growth drives demand and producers scale up capacity. ArcelorMittal, based in Luxembourg, and Japan’s Nippon Steel & Sumitomo Metal Corp. bid for the 10 million metric ton-a-year Essar plant in the latest round on Monday. Billionaire Anil Agarwal’s Vedanta Ltd. also made an offer, said people familiar with the matter.
“This is our Plan A and Plan B,” Aranha said. “We don’t believe that any other consortium bidding has a track record as strong as ArcelorMittal and Nippon.” ArcelorMittal has long-term plans to raise Essar’s capacity to 15 million to 20 million tons, he said.
The court will also on Wednesday hear a petition by Numetal to reinforce its suitability to bid for Essar.
-Bloomberg