Lead promoters of Essar Steel, a steel company that is battling insolvency proceedings, are wanting to pull their company from debts and regain their ownership.
The Ruias according to verified sources are reported as willing to pay an aggregate of Rs 54,389 crores that includes an offer of Rs 47,507 crores in upfront cash payment. This, the promoters hope would clear all lender' dues and pull the company back from insolvency proceedings.
The amount also includes Rs 45,559 crores in payouts to senior secured financial creditors. With this, Ruias explained that the financial creditors could make full recovery of their dues.
The committee of creditors associated with Essar Steel were informed of this during a takeover offer made by ArcelorMittal, among the world's largest steel market.
The company in a media announcement said, "The shareholders of Essar Steel have today (Thursday) submitted a proposal to the Committee of Creditors (CoC) for full settlement of the entire admitted claims of the financial creditors, operational creditors, and workmen and employees of Essar Steel India Ltd (ESIL), aggregating Rs 543.89 billion [Rs 54,389 crores], under Section 12A of the Insolvency and Bankruptcy Code."
"The CoC is empowered to consider and approve this Settlement Plan with the requisite voting share, on the basis of which the corporate insolvency resolution process against ESIL may be withdrawn," the statement said.
The offer is higher than the Rs 37,000 crores that NuMetal had bid for Essar's assets. It crossed the Rs 42,000 crores that Lakshmi Mittal's company ArcelorMittal had agreed to pay a month ago.
Essar Steel is not only a curious case, but also a compelling business sense for steel producers worldwide. Firstly with 10 million tonnes of production, Essar is a great investment bet for current steel companies such as Numetal (backed by Russian VTB and JSW Steel) and Vedanta.
With the steel industry reported to be in an upward trend, market players do not want to let go off any opportunity and that probably explains why Ruias are wanting to bring their company back from the insolvency proceedings.
Some interesting tweets and reactions:
Interestingly why this money was not paid earlier....For a layman that much money was used/enjoyed undoubtedly....#corporate— jaydeep deshmukh (@jaydeepsd) October 25, 2018
Ruia family makes last ditch effort to retain control of flagship asset - Essar Steel. https://t.co/hdqDmkzBlR via @BloombergQuint
Really funny! Thanks to PMModi sir's Industial Bankruptcy Law & PSU Bank's nil NPA initiatives ; now on the verge of permanently loosing their family Silver - ESSAR STEEL - RUIA family opens its chest of well hidden money and volunteers to clear all dues uptodate updated.— jagdish naredi (@jagdishnaredi) October 25, 2018
India’s first Tesla has been registered at Tardeo RTO in Mumbai by Prashant Ruia, CEO of Essar. I’m sure he would love to drive the car through the Mumbai-Pune Expressway.— Vaibhav Vishal (@ofnosurnamefame) January 7, 2018
Khoda Pahad, Nikola Tesla.