It also clarified, “We hold a non-controlling minority shareholding in Uttam Galva, have no representation on the board of directors, nor influence on management decisions. As such, we are not a promoter of Uttam Galva. Therefore, there is no objective reason for ArcelorMittal to be prevented from bidding for any steel asset under the restructuring process.”
The statement follows doubts raised regarding its bid after the recent amendments to the IBC through an ordinance, that not only barred defaulting promoters but added a new Section 29A. This prohibits promoters or sister concerns of companies
with non-performing assets (NPAs) of more than a year from bidding for these companies.
To bid, promoters have to make the NPAs standard assets by paying the principal and interest.
In 2009, ArcelorMittal had bought a stake in Uttam Galva Steels. Last September, however, Uttam Galva was classified as an NPA and is in the Reserve Bank of India’s second list of major ones in this regard. Two credit rating agencies, CRISIL and ICRA, have been appointed by the central bank to vet Uttam Galva’s restructuring proposal.
ArcelorMittal Netherlands BV is, according to the shareholding pattern filed with the BSE, classified as a promoter group company of Uttam Galva Steels, with 29.05 per cent stake, though it doesn’t have a board or management representative and is a passive shareholder.
ArcelorMittal is also in the process of conducting due-diligence for larger stressed assets in sector, namely, of Essar Steel, Bhushan Steel and Bhushan Power & Steel.
After the ordinance, resolution professionals are in the process of preparing to see that prospective bidders fulfill the terms under Section 29A. “We are in the process of writing to all the prospective bidders for an undertaking that they meet the terms under this section. Once they furnish this, due-diligence will be done,” said the resolution professional for a stressed steel asset.