ArcelorMittal chairman and CEO Lakshmi Mittal. Photo: AFP
ArcelorMittal chairman and CEO Lakshmi Mittal. Photo: AFP

The fate of one of India’s largest debt-defaulting companies, Essar Steel India, will be decided soon, with a creditors’ committee favoring a bid put forth jointly by the world’s largest steelmaker, Luxembourg-based ArcelorMittal, and Japan’s Nippon Steel.

The battle for Essar Steel, a fully integrated steel plant at Hazira in Gujarat state with annual production capacity of 10 million metric tons, has been lengthy, and the committee of creditors has opted for ArcelorMittal-Nippon Steel’s bid of 420 billion rupees (US$5.74 billion), CNBC TV18 reports.

A joint venture between ArcelorMittal SA and Japan’s Nippon Steel & Sumitomo Metal Corp has signed a letter of intent to buy the bankrupt steelmaker, the report said.

On Thursday the Ruia brothers, the owners of Essar Steel, made a last-ditch attempt to retain the company by stating that its board and shareholders had offered to pay 540 billion rupees to creditors to settle their claims.

However, the creditors’ committee is reportedly moving fast with the process to sell company to ArcelorMittal, the TV channel said.

Essar Steel is one of the 12 large corporate non-performing assets to be referred to the National Company Law Appellate Tribunal for insolvency proceedings by the Reserve Bank of India in June last year.

The troubled company owes lenders about 450 billion rupees, of which 316.71 billion rupees became non-performing as of March 31, 2016. It owes as much as 93% of the amount to a consortium of 22 creditors led by India’s largest lender State Bank of India.