By Nathan Allen

ArcelorMittal (MT.AE) said Wednesday that it has agreed to pay around $1 billion to clear the debts of two Indian steel companies so that it can go ahead with its bid for Essar Steel India Ltd.

India's Supreme Court ruled earlier in October that ArcelorMittal must pay off the debts of Uttam Galva and KSS Petron--two companies in which it previously held stakes--before its bid for Essar Steel could be considered.

"Given the significant benefits that ESIL would bring to ArcelorMittal, making this payment was an appropriate course of action under the circumstances," the company said.

ArcelorMittal hasn't disclosed the exact value of its bid but has confirmed that media reports of a $5.8 billion price tag are broadly accurate.

The Luxembourg-based steelmaker faces competition from rival NuMetal, a recently created entity set up by members of Essar's founding Ruia family and backed by Russia's VTB Bank (VTBR.MZ).

Essar's Creditors now have eight weeks to respond to the bids.

Write to Nathan Allen at nathan.allen@dowjones.com

(END) Dow Jones Newswires

October 17, 2018 07:18 ET (11:18 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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