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Bhushan Steel auction: Tata Steel, JSW Steel and company's own employees submit bids

Shanghai Luthan comments: As we noticed ArcelorMittal also in this bid, but we believe India still hope their domestic steel makes can take over troubled Bhushan.


The much-tracked auction of Bhushan Steel saw a flurry of activity as the bid deadline got over at 6pm on Saturday, February 3.


 JSW Steel, Tata Steel and a consortium of Bhushan Steel's employees, possibly backed by a Singapore-based fund, have put in bids for the troubled steel maker.


 The company, which had accumulated debt of over Rs 50,000 crore, had been put up for auction by the National Company Law Tribunal (NCLT). The bids were submitted on Saturday at the Gurgaon office of Deloitte, whose Vijaykumar V Iyer is the IRP (insolvency resolution professional) for Bhushan Steel.


 It is learnt that other companies such as ArcelorMittal, UK-based Liberty House and Steel Authority of India, who had earlier submitted expressions of interest, did not submit bids for the company. "The company hasn't submitted a bid," said a source close to Liberty House, owned by NRI billionaire Sanjeev Gupta.


The bids will now be opened on Tuesday.


 While the exact bid amounts couldn't be ascertained, it is believed to be around the Rs 28,000-30,000 crore mark. That is nearly twice the liquidation value of Rs 15,000 crore. The race, say executives, is a close one, and JSW Steel might just have its nose ahead in the race.


 The bid by Bhushan Steel’s staff is backed by 400 of the company's employees. "This includes employees from across the organization, including the plants, and also from across hierarchy," a senior official from the company told Moneycontrol. The identity of the fund, which is backing the employees, couldn't be ascertained.


 Bhushan Steel, which has a steel facility and mining lease in Odisha, had accumulated debt of nearly Rs 50,000 crore.


Controversy


Although the bidding process generated a lot of interest, it wasn’t without its share of controversy. Some of the bidders alleged that ArcelorMittal placed its bid after the 6pm deadline on Saturday.


 "According to the rules, this is not possible," said a senior executive from a company that's in the race. One bidder even planned to lodge a protest with Deloitte on Monday.


 But by late evening on Sunday, ArcelorMittal said it had not bid for Bhushan Steel.


 "ArcelorMittal can confirm it has not bid for Bhushan steel, but we remain interested at looking at future opportunities in India," a company representative told Moneycontrol in an emailed statement.


 Now all eyes are on the next round of the auction, which is the opening of bids on Tuesday.

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