ArcelorMittal, the world’s largest steelmaker, has taken a decisive step to pay up for Uttam Galva Steels and KSS Petron, clearing the decks to mount an aggressive bid for Essar Steel.

The board of Luxembourg-based company agreed to pay Rs 7,469 crore to the creditors following the Supreme Court judgment on October 4 that gave bidders Numetal and ArcelorMittal two weeks to pay overdue loan for non-performing accounts related to them.

“ArcelorMittal’s board of directors believe that Essar Steel represents a unique and compelling opportunity for the company to establish a significant footprint, with substantial expansion potential, in the high-growth Indian steel market. It concluded that, given the significant benefits that Essar Steel would bring to ArcelorMittal, making this payment was an appropriate course of action under the circumstance,” the company said in a statement.

The deadline for payment is ending tomorrow but ArcelorMittal decided to transfer the money by Wednesday night as it will be a bank holiday on Thursday.

A meeting of the committee of creditors of Essar Steel remained inconclusive on Wednesday. It is likely to meet again on Friday.

While 80 per cent or close to Rs 6,000 crore is being paid for UGSL, the rest is being transferred on account of KSS Petron. The lenders of Uttam Galva and KSS Petron have accepted the payment from ArcelorMittal.

The Lakshmi Mittal company had offered to pay Rs 42,000 crore to take over the debt laden Essar Steel.

On October 11, ArcelorMittal had written to the CoC to pay Rs 4,554 crore for overdue loans of Uttam Galva Steels and KSS Petron. It appears that lenders didn’t agree to the initial offer. It is unclear if Numetal will also pay the overdue amount. It’s largest shareholder VTB Bank of Russia has filed a petition in the Supreme Court to bid solo.

The apex court had held Numetal and ArcelorMittal ineligible under section 29A of the Insolvency &. Bankruptcy Code, 2016 as resolution applicants but allowed them one more chance to bid by paying up. The CoC now has two months’ time to finalise a resolution plan or Essar will face liquidation.

Apart from ArcelorMittal & Numetal, Vedanta is in the fray for Essar Steel.

Figure watch

• ArcelorMittal offers to pay Rs 7469 crore to repay lenders of Uttam Galva Steels and KSS Petron
  
• The Supreme court on October 4 had granted one more opportunity to ArcelorMittal and NuMetal to bid for Essar Steel if they clear their dues to corporate debtors within two weeks