Arcelor makes RM2.7b bid for Essar Power plant

NEW DELHI • ArcelorMittal SA has made an offer of 48 billion rupees (RM2.74 billion) to buy an Essar Power Ltd generation plant in India, outbidding the founding Ruia brothers, according to people with knowledge of the matter.

The non-binding offer from the world’s largest steel producer to lenders of the 1,200MW power plant in the central Indian state of Madhya Pradesh compares to a 35 billion-rupee settlement offer made by Essar’s founders — Shashi Ruia and Ravi Ruia — the people said asking not to be named, as the discussions are private.

The Ruias and steel tycoon Lakshmi Mittal are slugging it out before India’s courts to gain control of Essar Steel India Ltd, after ArcelorMittal emerged as the winning bidder to buy the alloy maker. The power plant, which supplies electricity to the steel mill, would boost ArcelorMittal’s attempts for a foothold in the Indian market.

Lenders, led by ICICI Bank Ltd, have given ArcelorMittal permission to carry out due diligence of the asset, which is in the middle of debt restructuring with 75 billion rupees of outstanding loans.

A firm bid may come only after the due diligence is complete, the people said.

ArcelorMittal and the Essar group spokesmen declined to comment, while there was no response from ICICI.

ICICI had filed an insolvency case against the Essar group last year, but the case stalled after the nation’s top court ordered a hold on such moves against power companies. — Bloomberg