NEW DELHI: The committee of Creditors (CoC) of Uttam Galva Steel has approved AM Mining India Private Ltd’s bid for the distressed steel company by 100 per cent vote share. The successful bidder is a subsidiary of ArcelorMittal Group.
Galva Steels has been undergoing insolvency process since the insolvency application moved by the State bank of India was admitted by the Mumbai bench of National Company Law Tribunal (NCLT) in October 2020.
According to sources close to the development, the ArcelorMittal arm has agreed to pay around Rs 4,000 crore for the Mumbai-based steel manufacturer as against claims of over Rs 21,000 crore.
Of this, bankers and other financial creditors had a claim of Rs 9,232, while over Rs 11,000 crore claims came from operational creditors, which include vendors, employees, etc.
ArcelorMittal India Private Ltd had the largest share in the Rs 9,232 crore claims made by the financial creditors. It had submitted claims of Rs 6,476 crore including accrued interest.
ArcelorMittal, which once held 29 per cent stake in Uttam Galva Steels, had extended Rs 5,285 crore in debt to corporate debtor.
As many six companies including JSW Steel, JSPL and Vedanta had submitted their expression of interest. However, only AM Mining India had submitted a resolution plan.
The CoC took less than 270 days after the admission of insolvency application to approve the resolution plan.
“The process went through smoothly without much litigation. Though there are a few petitions pending against the resolution process, we managed to get the approval of the CoC,” says Milind Kasodekar, the resolution professional in the case.
Now, the resolution plan would be presented before the NCLT for final approval.
This is ArcelorMittal group’s second biggest purchase through insolvency process. It was the successful bidder for Essar Steel for Rs 41,000 crore in 2019.
Crucial buyout
This is ArcelorMittal group’s second biggest purchase through IBC after it had acquired Essar Steel and its subsidiary Odisha Slurry Pipeline Infrastructure in March 2019 and March 2020 respectively.