Lenders are in favour of Arcelor’s bid of Rs 2,350 crore, which the company has offered to pay an upfront cash against the original bid of Rs 3,300 crore by Thriveni Earthmovers.
Thriveni, which has so far offered a cash payment of Rs 8 crore, is willing to offer the entire amount up front if the resolution professional takes away the requirement of providing a letter of commitment, according to sources.
The 253-km slurry pipeline that the companies
are vying for is critical to Essar Steel, which is set to be acquired by ArcelorMittal under the Insolvency and Bankruptcy Code
(IBC). The transaction for Essar is expected to be closed by mid-December. The pipeline connects the site of the iron ore beneficiation plant in Dabuna with the 12-million-tonne pellet plant in Paradip, an important ancillary unit of Essar Steel.
For Thriveni, the asset offers big opportunity for financial growth as the company plans to up the capacity of the pipeline from 10 MT to 50 MT over the next few years. The company wants to use the pipeline for movement of slurry to other iron mins, as part of its resolution plan. The pipeline is leased to Essar and the arrangement with OSPIL is captured in the Right to Use Agreement. The resolution professional to Essar had prayed that the pipeline be declared an asset of Essar Steel.
However, the National Company Law Tribunal (NCLT), in an order dated February 2018, had said the applicant could not claim ownership of the pipeline in view of the civil suit in the Calcutta High Court.