Uttam Galva happens to be one of the largest manufacturers of cold-rolled and galvanised products in Western India. It procures hot-rolled steel and processes it into cold-rolled steel and further into galvanised steel and colour-coated coils.
According to sources, it has a cold-rolling capacity of 1.2 million tonnes, which can be expanded.
Pankaj Malhan, chief executive officer, ESL Steel, said, “As of now, no comment.”
For ArcelorMittal, it would be an opportunity for recouping its payment of Uttam Galva’s dues. According to the list of financial creditors, as of November 23, ArcelorMittal
India’s admitted claims were Rs 6,476 crore (71.40 per cent voting share) and AMNS Luxembourg Holding S.A.’s Rs 1,445 crore (15.94 per cent voting share).
ArcelorMittal became a significant financial creditor of Uttam Galva by taking on the bulk of Uttam Galva’s debt in 2018 to become eligible for the Essar Steel bid under the insolvency law. Insolvency and Bankruptcy Code
(IBC) rules prevented promoters of defaulting companies from bidding for assets. Before submitting its bid for Essar Steel, ArcelorMittal was a co-promoter of Uttam Galva.
Uttam Galva was on the Reserve Bank of India’s second list of non-performing assets to be resolved under the IBC. A sharp increase in raw material prices and cheap imports from China landed the company in losses and it started delaying payment to lenders.
However, with ArcelorMittal taking on the debt, State Bank of India (SBI), which had moved the petition, withdrew it.
But Uttam Galva defaulted on balance debt subsequently and on October 1, 2020, the National Company Law Tribunal, Mumbai Bench, admitted a petition filed by SBI under the IBC.
The corporate insolvency resolution process for Uttam Galva is expected to be completed by March 31.