The bankruptcy court approved the resolution plan of the global steel firm ArcelorMittal’s local subsidiary for debt-laden Uttam Galva Steels Ltd.
The Mumbai bench of the National Company Law Tribunal (NCLT), presided over by members PN Deshmukh and KK Vohra, in an oral order allowed the application filed by the resolution professional of the company.
“It (resolution plan) shall be binding on the corporate debtor, its employees, members, creditors, including the central government, any state government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force is due, guarantors and other stakeholders involved in the resolution plan,” the NCLT said in a 50-page order.
The resolution plan envisages repaying Rs 4,050 crore, including to financial and operational creditors, and an equity infusion of Rs 320 crore.
On April 25, the Mumbai bench of the NCLT had reserved its order on an application filed by the resolution professional of Uttam Galva Steels, seeking approval of the resolution plan filed by AM Mining India Pvt Ltd, a wholly owned subsidiary of ArcelorMittal India Pvt Ltd.
During the hearing, senior advocate Ravi Kadam along with the law firm S&R Partners, appearing for ArcelorMittal India, told the tribunal that the revival plan was almost unanimously approved by the lender. The company emerged as the sole bidder for Uttam Galva Steels in March 2021. Law firm Shardul Amarchand Mangaldas & Co appeared for the lenders in the case.
In June last year, lenders to Uttam Galva Steels had almost unanimously approved the resolution plan of Lakshmi Mittal-owned ArcelorMittal Group, Europe’s largest steelmaker.
On October 1, 2020, the tribunal admitted an insolvency petition against the debt-laden Uttam Galva Steels in a petition filed by the State Bank of India (SBI). The company had defaulted on its external commercial borrowing facility extended by the bank to the tune of $6.6 million in November 2019.
Earlier, the loans were taken over by ArcelorMittal, which paid off Rs 4,922 crore to the secured financial lenders of Uttam Galva Steels, including SBI, and later, the overdue principal paid was assigned to ArcelorMittal India. The ArcelorMittal group had acquired the debt of the company from Uttam Galva Steels’ lenders to be qualified to acquire Essar Steel.
The company owes more than Rs 9,300 crore to its lenders. ArcelorMittal Group has 87% voting rights in the committee of creditors.
Uttam Galva Steels is among the largest makers of value-added steel in western India, with facilities located at Khopoli, about 75 km from Mumbai.
This will be ArcelorMittal’s third acquisition through the insolvency resolution process, after Essar Steel Ltd and Odisha Slurry Pipeline Infrastructure.
