Home Market Renaissance to challenge move to award Electrosteel to Vedanta

Renaissance to challenge move to award Electrosteel to Vedanta


MUMBAI: Renaissance Steel, one of the failed bidders for Electrosteel Steels under the bankruptcy process, plans to challenge the committee of creditors decision to award the trouble long steel products maker to Vedanta Resources, arguing that the latter was ineligible for bidding.

“We are filing an appeal in the NCLAT (National Company Law Appellate Tribunal); our contention is that Vedanta is not eligible to bid under section 29A,” a Renaissance Steel official said. “So how can they be the final winnerRs ” the person said on condition of anonymity.

Renaissance Steel did not respond to ETs query as of press time Friday.

The Kolkata bench of the National Company Law Tribunal (NCLT) had on Tuesday cleared Vedantas Rs 5,320-crore resolution plan for Electrosteel, rejecting objections by Renaissance Steel.

Renaissance Steel had earlier challenged eligibility of Tata Steel and Vedanta under Section 29A of the Insolvency and Bankruptcy Code (IBC). As per the rule, any company or its subsidiaries will not be eligible to submit bids if they have been convicted for an offence punishable for more than two years.

In a letter submitted to the committee of creditors, Renaissance Steel claimed that subsidiaries of Tata Steel and Vedanta have been convicted in the UK and Zambia, respectively, and hence they should be disqualified from bidding.

Anil Agarwal-led Vedanta Group had emerged the highest bidder for Electrosteel Steels by quoting Rs 4,500 crore while Tata Steels bid was worth Rs 3,500 crore. Renaissance Group and Edelweiss Asset Reconstruction Company had also submitted bids for a resolution plan.

Electrosteel Steels was among the first 12 large corporate accounts that the Reserve Bank of India identified for insolvency resolution in June last year.

It owes lenders more than Rs 13,000 crore and operational creditors Rs 191.6 crore.

Most large cases being tried under the insolvency process are facing legal hurdles as losing bidders are pursuing legal options that may end up delaying or even disrupting the insolvency resolution process.

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