Essar Group logo outside their headquarters in Mumbai. The company's steel unit has been listed as one of the top defaulters by the Reserve Bank of India _ Reuters

Troubled steelmaker Essar Steel Ltd, which owes nearly Rs 450 billion (US$ 6.93 billion) to banks and has been identified for insolvency action by India’s central bank, has attracted initial interest from five large metal firms.

They include ArcelorMittal, Sumitomo Corporation, Vedanta Resource Plc, Tata Steel Ltd. and Steel Authority of India Ltd. The Ruias, who are the promoters of Essar Steel, have also shown interest, reports Bloomberg.

Interest from large strategic investors will be a relief for lenders, which include India’s largest bank State Bank of India and UK-based Standard Chartered Bank, who have been trying to resolve the Essar Steel case for the past two years.

Surprisingly JSW Steel, which has been aggressive in bidding for other stressed steel companies, is reportedly not keen on Essar Steel.

Essar Steel has a 10-million tonne facility in Hazira, Gujarat, and  is involved in the high-margin flat steel products business. Since there is a good demand for flat steel in the domestic as well as export markets, it is attracting many buyers.

The debt-laden company was among the first dozen large stressed companies identified for insolvency action by the Reserve Bank of India. The steel sector is one of the biggest contributors to Indian banks’ bad loans which stood at Rs 8 trillion (US$ 12.3 billion) at the end of June.