The reserve price for the bids, with a June 17 deadline, is Rs 200 crore, showed a document on the website of the process advisor, BoB Capital Markets.
It said the residual liabilities represent the net balance remaining following the mandatory deduction of recoveries realised under the resolution plan whereby ArcelorMittal India had taken over Essar Steel in a bankruptcy administration.
“These recoveries are in lieu of personal guarantees issued by Prashant and Ravi Ruia and corporate guarantees by companies like Essar Investments, Essar Steel Mauritius, Essar Steel Asia and Essar Steel,” said a person aware of the details. “The total amount of Rs 13,751 crore has been calculated after taking into account the residual recoveries from Essar Steel, including accumulated interest post the ArcelorMittal deal.”
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Lenders led by the State Bank of India had recovered close to 90% of more than Rs 49,000 crore in dues from Essar Steel when the bankruptcy process was completed after a Supreme Court order in 2019. Banks are now moving to recover the residual ?7,000 crore to Rs 9,000 crore, which has compounded to Rs 13,751 crore with interest.
Personal guarantees were brought under the bankruptcy purview in December 2019, allowing lenders to initiate recoveries against promoters guarantees separately while also pursuing corporate repossessions.Government assures 78 days of oil amid MPs’ concerns
In 2023, the Supreme Court dismissed challenges by promoters against invoking guarantees, allowing banks to restart pursuing these cases.
In this case, BoB Capital Markets has set June 16 for bidders to access the data room for due diligence. In case more than two expressions of interest are received, lenders will conduct an electronic auction to find the highest bidder, the document said.