ArcelorMittal has sent a letter to Essar SteelNSE 0.00 % lenders, saying it is preparing to repay dues worth Rs 4,554 crore of Uttam GalvaNSE -1.27 % and KSS Petron so that it could bid for Essar Steel under the Insolvency and Bankruptcy Code.
The Supreme Court had in an October 4 order directed the world’s largest steelmaker to clear the dues of Uttam Galva and KSS Petron — both loan defaulters where ArcelorMittal held a significant stake before exiting them in February this year — to be eligible to bid for Essar Steel.
“We intend to proceed forward with an assignment of such overdue loans to ArcelorMittal India Private Ltd (or entities designated by it),” ArcelorMittal told the committee of creditors (CoC) of Essar Steel. “We will separately work with you to progress execution of the necessary documents,” the company said in its response to a letter sent by the committee on October 9.
It requested the CoC to coordinate with the relevant lenders of Uttam and Petron to “expeditiously complete the necessary steps in relation to such payments and thus ensure compliance with the timeline stipulated by the SC Judgment”.
It also enclosed details of such overdue loans, including interest up to February 7, 2018 and February 9, 2018 for Uttam and Petron respectively, with the letter. ArcelorMittal declined to comment on the letter.
According to the letter, Uttam Galva dues, including principal and interest charges under external commercial borrowings, rupee term loan and working capital loans, amounted to Rs 3,987 crore. In the case of KSS Petron dues amounted to Rs 567 crore. This added up to Rs 4,554 crore. Sources close to the Essar Steel auction process, however, put ArcelorMittal’s total dues connected to Uttam Galva and KSS Petron at over Rs 7,500 crore, excluding interest amount.
