In the first round, bids were submitted by only Numetal and ArcelorMittal. However, in the second round, JSW joined Numetal in the operating company as an investor. Also, Vedanta joined the fray. After the submission of bids in the first round, VTB, which is the lead investor in Numetal, had indicated that it could increase its offer. So, it is most likely that the bids in the second round would have been more aggressive. Sources say lenders are most likely to seek fresh bids.
The second option for the CoC would be to go for an appeal against the order, which is likely to be time-consuming, sources said.
The third option, they say, would be to open the bids and give Numetal and ArcelorMittal time for rectification. But that could be challenged by other parties, depending on to what extent the rectification can be done.
ArcelorMittal was found to be ineligible on technical grounds because it had sold shares in Uttam Galva Steels but had not been declassified as a promoter from stock exchange records. Since then, however, ArcelorMittal has been declassified as a promoter from the stock exchanges. Whether that would suffice or not remains to be seen. Meanwhile, Uttam Galva Steels has also sought time to repay all its dues. If Uttam Galva Steels ceases to be a non-performing asset, ArcelorMittal’s bid may assume significance.
On Numetal’s part, whether Rewant Ruia will have to be dropped because he is part of the promoter group family and if JSW Steel can be brought in as an investor in the operating company could be key questions. Numetal’s bid was rejected in the first round because Aurora Enterprises had a 25 per cent stake in which Rewant Ruia had an indirect minority interest.
Vedanta, which was a bidder in the second round, could challenge the order to get back in the race, and so could JSW Steel.
Lenders are also afraid of taking decisions, said sources. “Lenders do not want to take any risk and want all IBC transactions to be vetted by the courts due to fear of persecution in future,” said a lender. The final decision on these tricky issues, lawyers said, could well end up at the Supreme Court.