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Vedanta races past Tata group to emerge as top bidder in resolution process for Electrosteel Steels

Anil Agarwal-led Vedanta Group has emerged as top bidder for bankrupt Electrosteel Steels as part of the ongoing insolvency proceeding the State Bank of India (SBI) recently triggered against the steel company. Vedanta outbid Tata Group that was also in the race for the company which was referred to the national company law tribunal (NCLT) in July 2017 after the Reserve Bank of India gave a go-ahead for the same.

Vedanta put in Rs 4,500 crore while Tata Group came up with a bid of Rs 3,500 crore. Vedanta’s bid may also include some sweetener, this Economic Times report claimed. The other companies in the fray were the Renaissance Group led by the Abhishek Dalmia and a foreign based fund supported by Edelweiss.

Anil Agarwal.

Anil Agarwal.

Earlier, the tribunal had appointed Dhaivat Anjaria of PwC as interim resolution professional to resolve the loans issue. The bids put in by Vedanta and Tata Group are all-cash offerings, according to the ET report. It is expected that the lenders will have to bear a hair cut in the range of 55 to 65 percent on completion of the buy-out deal.

The company, one of the many bankrupt entities at present undergoing insolvency process under IBC, has a total debt of Rs 13,000 crore that includes the actual loan of Rs 10,000 crore and the interest payment. The State Bank of India is the principal lender to the Electrosteel Steels against whom the insolvency and bankruptcy code 2016 was invoked on recommendations of the central bank.

On Wednesday, the committee of creditors (CoC) will hold a meeting to analyse the resolution scheme of four bidding companies. Vedanta is a major player in iron ore business and if it manages to win the bid it will help the company expand its footprints in steel industry.

Updated Date: Jan 09, 2018 18:04 PM

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