The Mumbai bench of the National Company Law Tribunal has admitted insolvency proceedings under the Insolvency and Bankruptcy Code, 2016, filed against Uttam Galva Steels by DF Deutsche Forfait.
The Mumbai bench of the National Company Law Tribunal (NCLT) has admitted insolvency proceedings under the Insolvency and Bankruptcy Code, 2016, filed against Uttam Galva Steels by DF Deutsche Forfait. According to an interim order dated April 10, the petition is scheduled to be heard on April 17 for the appointment of an interim insolvency resolution professional. It added that a request by the company for grant of stay until an appeal is filed was not granted. In FY16, the company reported a net loss of `1,555 crore on revenues of `8,337 crore and its gross debt stood at `3,739 crore.
In June last year, Uttam Galva had said that the Board for Industrial and Financial Reconstruction has registered its reference under the Sick Industrial Companies (Special Provisions) Act.
“We are in the process of examining the reasons given in the order and will take further action including filing appeal before the NCLT as advised by our solicitors,” the company said in a filing to the National Stock Exchange. Lenders to the steelmaker include State Bank of India, Canara Bank, Punjab National Bank, Union Bank of India, IDBI Bank, Bank of Baroda, Indian Overseas Bank and ICICI Bank, among others.
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Under the bankruptcy code, an interim resolution professional is appointed within 14 days of the bankruptcy insolvency commencement date.
DF Deutsche Forfait is a Germany-based provider of trade finance solutions and offers the non-recourse purchase and sale of foreign trade receivables (forfaiting).
The company purchases receivables through its international network, converts them into a marketable product and sells them to investors, according to its website.
The Miglani family-controlled Uttam Galva Group had sought extension of the repayment period of its loans under the Reserve Bank of India’s 5/25 scheme. The Miglanis hold controlling stakes in Uttam Galva Steels and the erstwhile Lloyds Steel, now called Uttam Value Steels, both heavily in debt.