The bankruptcy tribunal has approved a Rs 4,050-crore resolution plan submitted by AM Mining India, a local subsidiary of global steel major ArcelorMittal, for debt-laden Uttam Galva Steels. This would be ArcelorMittal’s third purchase through insolvency processes in India, after Essar Steel and Odisha Slurry Pipeline Infrastructure.
The National Company Law Tribunal’s (NCLT) Mumbai bench, presided by members PN Deshmukh and KK Vohra, orally pronounced the order approving the resolution plan on Friday. A copy of the order is yet to be uploaded to NCLT’s website, Uttam Galva Steels said in a regulatory update.
According to the resolution plan, AM Mining had made an offer of about Rs 4,050 crore to lenders, while the admitted claims stood at Rs 9,338 crore. Of the admitted claims by financial creditors, those by ArcelorMittal India were for about Rs 6,476 crore and AMNS Luxembourg Holding for Rs 1,445 crore.
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Rivals, including JSW Steel and Jindal Steel & Power, had also submitted expressions of interest for the beleaguered firm. Uttam Galva, formerly co-promoted by ArcelorMittal, had been classified a non-performing asset for more than a year.
Uttam Galva has a cold-rolling capacity of one million tonne and galvanising capacity of 750,000 tonne per annum across its two units at Khopoli near Mumbai. The firm had posted a net loss of Rs 51 crore in June quarter (net loss of Rs 75 crore in same period of last year) on revenue of Rs 238 crore (from Rs 196 crore).
In 2018, when ArcelorMittal’s bid for Essar Steel was being considered, the Supreme Court had directed the company to clear all Uttam Galva Steels loans, as it held stakes in the company. It later cleared loans worth Rs 7,469 crore and sold about 30% stake back to Uttam Galva Steels’ lenders. This made the company eligible for the Essar Steel bid.