Lenders approve ArcelorMittal arm's Rs4,000-cr bid for Uttam Galva
07 June 2021
The Committee of Creditors (CoC) of Uttam Galva Steel has approved a Rs4,000-crore bid by AM Mining India Private Ltd, a subsidiary of ArcelorMittal Group, for 100 per cent stake in the distressed steel company.
The Mumbai-based steel manufacturer owes more than Rs21,000 crore to banks and operational creditors. Financial creditors had claims of around Rs9,232 crore while operational creditors, which include vendors, employees, etc had claims of over Rs11,000 crore on Uttam Galva.
Against this, the ArcelorMittal group firm will pay around Rs4,000 crore as per the bid approved by the CoC.
Galva Steels has been under the insolvency process after the State Bank of India moved an insolvency application at the Mumbai bench of the National Company Law Tribunal (NCLT) in October 2020.
Of this, bankers and other financial creditors have a claim of Rs9,232, while operational creditors, which include vendors, employees, etc, have a claim of over Rs 11,000 crore. ArcelorMittal India Private Ltd had the largest share in the Rs9,232 crore claims made by the financial creditors. It had submitted claims of Rs6,476 crore, including accrued interest.
ArcelorMittal, which once held 29 per cent stake in Uttam Galva Steels, had extended Rs5,285 crore in debt to corporate debtor.
As many six companies, including JSW Steel, JSPL and Vedanta, had submitted their expression of interest. However, only AM Mining India had submitted a resolution plan.
The CoC took less than 270 days after the admission of insolvency application to approve the resolution plan.
“The process went through smoothly without much litigation. Though there are a few petitions pending against the resolution process, we managed to get the approval of the CoC,” says Milind Kasodekar, the resolution professional in the case.
Now, the resolution plan would be presented before the NCLT for final approval.
This is ArcelorMittal group’s second biggest purchase through insolvency process after it bought debt-laden Essar Steel for Rs41,000 crore in 2019.