Bidding for bankrupt Essar Steel in India is back to the beginning after offers from Numetal and ArcelorMittal failed to clear the eligibility test. Lenders declared both bids ineligible since the amended Insolvency and Bankruptcy Code prohibits related parties and insolvency-linked parties from bidding.
ArcelorMittal had invested in Uttam Galva, which defaulted on loan repayments. Numetal's minority shareholder Rewan Ruia was termed a “connected person” as his father was co-founder of Essar Steel. Both entities are expected to take further steps to have the eligibility determination reassessed.
A fresh round of bidding has been called with the second round of bids starting April 2. Reportedly, Tata Steel, Vedanta Group, SSG Capital, AION, Nippon Steel, and JSW Steel may be part of the second bidding process.