However, the Committee of Creditors (CoC), which met here on Wednesday has rejected resolution plans of Numetal and Arcelor under the Insolvency and Bankruptcy (IBC) process and was considering calling in fresh bids.
At a meeting held here on Wednesday, the creditors made a decision to call for fresh bids, which could further delay the entire process of finding a suitor for the company.
As much as Rs51,800 crore of claims on Essar Steel have been admitted under the bankruptcy process. Numetal and ArcelorMittal which were the only two bidders for Essar Steel submitted their bids on February 12 and both were challenging the eligibility of the other party to bid for the company.
The lenders' decision came a day after Numetal moved the National Company Law Tribunal (NCLT), seeking a declaration that it is eligible to make an offer for Essar Steel. Rewant's presence in Numetal as a shareholder was the primary reason for the lenders to reject the bid.
"Numetal apprehends that full facts submitted by Numetal for determination of its eligibility to submit a Resolution Plan have not been appropriately assessed", the company said in a press release. Accordingly, in the Application, all necessary facts for determining the eligibility of Numetal have been placed before the NCLT for an objective assessment. Besides Numetal and Arcelor, the other four bidders include Nippon Steel & Sumitomo Metal Corporation, Tata Steel, Vedanta Group and Steel Authority of India Ltd.
Sources said the creditors will meet on Friday and decide on whether to restrict fresh bidding to companies that had earlier submitted an Expression of Interest but did not place financial bids or open it up to all interested parties.
However, reports suggest Tata Steel, Vedanta and JSW Steel have decided against bidding. After this, Essar Steel will have to be liquidated if a resolution plan does not work out.
Essar Steel, which has a steel-making capacity of 9.7 million tonnes per annum, owes more than Rs 45,000 crore to lenders, of which Rs 31,671 crore was classified by banks as non-performing assets as of March 31, 2016.
In view of the urgency of the matter, the Application was mentioned before the NCLT March 20, 2018.On hearing the counsel appearing for Numetal, the NCLT issued a notice to the Committee of Creditors (CoC) through the Resolution Professional.