ArcelorMittal makes the cut, emerges as sole bidder for Uttam Galva Steels | Business Standard News

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Six other firms, including four steelmakers, had submitted an expression of interest (EOI) for the debt-laden firm

ArcelorMittal had entered into a co-promotion agreement with the Miglani family and bought a 32 per cent stake in Uttam Galva Steels in 2009 when its greenfield projects were not going anywhere.

ArcelorMittal is the sole bidder for debt-laden Uttam Galva Steels, where it was once a co-promoter.

Six other firms, including JSW Steel, Jindal Steel & Power (JSPL) and Vedanta-owned ESL Steel, had submitted an expression of interest (EOI) for Uttam Galva. But after due diligence, only ArcelorMittal submitted a resolution plan, sources said.

ArcelorMittal did not comment.

The date for submission of resolution plans had been extended by two weeks to March 19. The resolution plan was submitted by AM Mining India and a consultant was likely to be appointed to do the usual check of Section 29A on the bidder, sources further said.

Section 29A of the Insolvency and Bankruptcy Code (IBC) bars those who have contributed to the default of the corporate debtor or a “related party” from submitting a resolution plan.

Uttam Galva has manufacturing facilities in Khopoli, Maharashtra, and in close proximity to Nhava Sheva and Mumbai ports, which puts it at an advantage for export. It has a cold-rolling capacity of 1.2 million tonnes, which can be expanded.

According to the list of Uttam Galva’s financial creditors, as on March 16, total admitted claims stood at Rs 9,230.95 crore; of this, ArcelorMittal India Private Limited’s claims were at Rs 6,476.16 crore with a 70.16 per cent voting share, AMNS Luxembourg Holdings’ claims at Rs 1,445.60 crore with a voting share of 15.66 per cent.

ArcelorMittal had taken on bulk of Uttam Galva’s debt to become eligible for the Essar Steel bid. If ArcelorMittal’s resolution plan for Uttam Galva passes muster, then its association with the company would have come a full circle.


ArcelorMittal had entered into a co-promotion agreement with the Miglani family and bought a 32 per cent stake in Uttam Galva Steels in 2009 when its greenfield projects were not going anywhere. Inordinate delays had derailed its plans of setting up a 12 million tonne greenfield in Jharkhand (the memorandum of understanding for which was signed in 2005) and Odisha (2006). However, with the stake in Uttam Galva, the global steel major got a toehold in the Indian market.

Then, the Insolvency and Bankruptcy Code (IBC) threw up an opportunity to gain a major entry and ArcelorMittal submitted a bid for Essar Steel (now AM/NS India) in 2018. Ahead of submission of bid, however, ArcelorMittal sold its stake in Uttam Galva to promoters at Rs 1 a share to become eligible.

The move was prompted by Section 29A, which prevented a promoter of a defaulting firm from bidding for assets under IBC; Uttam Galva had been classified as a non-performing asset (NPA) by banks for more than a year and it was on the Reserve Bank of India (RBI’s) second list of NPAs mandated for resolution under IBC.

However, in spite of selling shares, the Supreme Court found Arcelor to be ineligible for the Essar bid, but exercised its extraordinary power under Article 142 of the Constitution in granting time to make payment of overdues for defaulting companies.

Arcelor made the payment and took on most of Uttam Galva’s debt. As a consequence, State Bank of India (SBI), which had moved the petition in National Company Law Tribunal for admission of Uttam Galva, withdrew it. But Uttam Galva defaulted on balance debt subsequently and on October 1, 2020, the NCLT Mumbai Bench admitted a petition filed by SBI again under the IBC.

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