LN Mittal, chairman and CEO of the world’s largest steelmaking company, ArcelorMittal, has maintained that his firm was never the promoter of Uttam Galva Steel and is therefore an eligible bidder for Essar Steel under the Insolvency and Bankruptcy Code.
LN Mittal, chairman and CEO of the world’s largest steelmaking company, ArcelorMittal, has maintained that his firm was never the promoter of Uttam Galva Steel and is therefore an eligible bidder for Essar Steel under the Insolvency and Bankruptcy Code. He said his firm would continue to engage with the committee of creditors (CoC) on the issue of eligibility.
In an interview with FE, he said, “Our fundamental position is that we are eligible and in reality, were never the promoters of Uttam Galva. We do not believe the intention of Section 29A was to exclude reputable, experienced international investors from bidding for Indian assets. So, any discussion about repayment of any dues would need to be considered in this context”.
He went on to add, “We look forward to continuing our dialogue with the committee of creditors, to demonstrate our commitment to Essar Steel and the Indian steel industry, and to consider any specific feedback they have around the subject of eligibility”.
Mittal’s comments assume significance because ArcelorMittal’s first bid for the bankrupt Essar Steel was disqualified by the resolution professional (RP) Satish Kumar Gupta on the ground that it was a promoter of Uttam Galva and KSS Petron, both of which have defaulted on loans.
ArcelorMittal held a 29.5% stake in UttamGalva and was classified as a promoter of the company by the stock exchanges. It sold its stake in February before submitting the bid for Essar Steel. Since then, it has also been declassified as a promoter by the stock exchanges. However, some bankers have argued that merely selling its stake in Uttam Galva does not make it eligible to bid for Essar Steel.
In the meanwhile, the National Company Law Tribunal (NCLT) has directed the RP and the CoC to give ArcelorMittal and rival bidder Numetal the opportunity to rectify their bids in the first round, and said that inviting a second round of bids without offering bidders an opportunity to rectify their bids was “prima facie invalid”. ArcelorMittal had bid in the second round as well.
ArcelorMittal has also appealed against the disqualification of its bid for Essar Steel at the National Company Law Appellate Tribunal (NCLAT). The CoC is yet to take a decision on the eligibility of the bids in the first round.
(Travel for this report was sponsored by ArcelorMittal)