Lakshmi Mittal-led ArcelorMittal made an offer to buy an additional 29.4 per cent stake in domestic steel firm Uttam Galva Steel at Rs 120 a share.
"There could be a slight delay in getting the approval from SEBI, so there could be few days delay in starting the open offer but we are still on target to complete this transaction by middle of December."
Uttam Galva Steels is a part of the Reserve Bank of India's second list of cases, which will be referred to the bankruptcy tribunal for insolvency proceedings after lenders failed to resolve the account by December 2017.
The proposed FDI of Rs 503.37 crore (Rs 5.03 billion) by ArcelorMittal, Netherlands, has been approved by the Foreign Investment Promotion Board, the finance ministry said in New Delhi.
The main reason for the move is the volatility in prices and inconsistent supplies for value-added grades.
Sources close to the development said a significant amount of around Rs 7,000 crore had been put into the SBI account with a proposal on escrow of the deposited funds.
In 2009, ArcelorMittal had picked up a stake in Uttam Galva Steels. A new Section 29A of the IBC prohibits promoters of companies with NPAs of more than a year from bidding for these companies.
Industry experts say that even though international companies face problems in setting up new projects on their own, given the problems associated with acquiring land and rehabilitating the displaced people, their keenness to become a part of the growing Indian market remains intact.
"ArcelorMittal has shown interest in the stake buy and the due diligence will start soon," said an official familiar with the development. The Facor stock closed at Rs 23.5 a share on the Bombay Stock Exchange today. At the current price, the company has a market capitalisation of Rs 435 crore. However, the deal is expected at Rs 35 a share, about 50 per cent premium to the current market price.
With a 4-5 per cent rise in steel prices on January 1, cars and consumer durables are set to get dearer.
Only a handful of domestic steel producers have announced their results for 2006-07, but the indications are that they will report stellar performances this financial year.
Transcript of the weekly stock market chat with Pranav Sanghavi.
Seeking ArcelorMittal be declared ineligible to bid for Essar Steel, the petition cited Section 29A of the Insolvency and Bankruptcy Code which bars promoters of defaulting companies from bidding for stressed assets.
These together account for 40 per cent of bad loans of around Rs 4 trillion.
Apart from being the most successful cases under the IBC, Bhushan Steel and Essar Steel are among the best steel assets in the country. They also ended up helping their lenders get back a significant chunk of the money while allowing Tata Steel to consolidate its position and giving the world's two largest steel makers - ArcelorMittal and Nippon Steel - a strong foothold in India. A significant contrast was the pace at which these two cases were resolved under the bankruptcy code. In the annals of the Insolvency and Bankruptcy Code (IBC), Essar Steel may go down in history as the most noticeable resolution with the world's largest steelmaker, ArcelorMittal, and the incumbent, Ruia family, locked in an intense battle spanning more than two years and ultimately resulting in full recovery of the principal amount for the financial creditors.
In corporate India where family disputes have become far too common, the Miglanis work as a team.
Around 241 companies were sent for liquidation under the IBC by various NCLT benches and in only 58 cases have the resolution plans been accepted
What started in 2009 as a five-location service has seen a steep expansion.
ArcelorMittal could be interested in Bhushan Steel or Essar Steel, two of the five steel companies referred by RBI for insolvency proceedings.
The haircut for major banks stands at 52 per cent, if the dues of Jaypee Infrastructure, Lanco Infrastructure and Era Infrastructure are kept out of the calculation.
The trouble is largest FDI projects in India have had a tragic history.
But he is actively pursuing greenfield steel plants in Karnataka and Jharkhand; ultimately, only one of these might come up.
Sensex ends in green, bluechips in spotlight.
The country imported 9.31 million tonnes (mt) of steel in FY15.
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