ArcelorMittal, which surpassed the one-time settlement offer of Essar promoters for 2×600 MW Mahan thermal power project in Madhya Pradesh, will submit its bid by April 22. The bid will then be opened for Essar to match the offer, bankers close to the development told FE.

ArcelorMittal had offered lenders `4,800 crores for the Mahan project, surpassing the Essar promoters’ one-time settlement offer of `3,500 crores in February.

“The ArcelorMittal offer was outside the bidding process, so it was not benchmarked. We had to call another round of bid to determine the market price for the Mahan project. The last date for submission of bid is April 22 for ArcelorMittal, following which it will be opened for Essar to match the offer,” bankers said.

ArcelorMittal is also in process of acquiring Essar Steel, which was taken to the NCLT for non-payment of dues.

Rajeev Sharma, chairman and managing director of PFC, one of the consortium lenders to Essar Power’s MP project, had told FE in February, “We will offer promoters the first right of refusal, if they match or exceed the offer, we will select the highest offer. As a transparent mechanism to choose the bidder, we will open the window for a day and the highest bidder will be chosen under the reverse auction process.” When contacted, an Essar Power spokesperson declined to comment on the development. However, sources close to the company said Essar is unlikely to match the offer.

In September 2018, ICICI Bank, the lead lender for the Essar Power’s Mahan project, had moved the NCLT seeking initiation of insolvency proceedings against Essar Power MP.

However, following the apex court order maintaining a status quo on relief to power companies from the February 12 RBI circular, lenders decided to resolve the issue outside the NCLT.

Essar Power MP owes the consortium of lenders around Rs 5300 crore.

There are more than 60,000 MW stressed power projects in the process of resolution inside and outside the NCLT. These projects were identified on the basis of their inability to service loans due to various operational factors like lack of PPAs or fuel linkages.

News Source: Financial Express