Fresh bids are being invited for Uttam Value Steels and Uttam Galva Metallics, after the lenders to the two companies rejected offers from SSG Capital Management and New Zone Intertrade FZE terming them “unsatisfactory”, two people in the know said.
The official appointed by the bankruptcy court to resolve their debt issues has invited fresh expressions of interest (EoI) for the companies that together owe Rs 5,500 crore to a consortium of lenders. The deadline for submitting new EoIs is March 1.
Earlier, a consortium led by SSG Capital Management had offered an upfront payment of Rs 427 crore and another Rs 427 crore over a period of five years for the assets, one of the people said. This offer — at just over the liquidation value of Rs 750 crore set by Duff & Phelps — would have required the lenders to let go of more than 80% of the loans outstanding if they had accepted it.
The offer from the other bidder, a consortium led by New Zone Intertrade FZE, could not be ascertained. The bid was rejected because it was not accompanied by a bank guarantee, the people said.
The twin assets include a 1-million-tonne hot-rolled production capacity of Uttam Value Steels at Wardha in Maharashtra for which it purchases pig iron from Uttam Galva Metallics.
A person close to the companies said once acquired, the plants could be brought to their full capacity utilisation within six months. The reason for the lukewarm response during the bidding process could be a fall in operating margins in steel production over last year due to strong iron ore prices, he said.
Both companies had initially received interest from a number of strategic as well as financial players.
Source: Economic Times