ArcelorMittal likely to bid for Uttam Galva after NCLT admission: Report

ArcelorMittal is likely to bid for Uttam Galva Steels, which was admitted to the National Company Law Tribunal (NCLT) recently, A Business Standard report citing sources familiar with the matter said.

The steel giant was once a co-promoter of the firm.

The NCLT route would crystallise Uttam Galva's debt for ArcelorMittal, sources told the publication. The bid would also ensure no hidden liabilities, the report added.

ArcelorMittal had taken bulk of Uttam Galva’s debt to be considered eligible for the Essar Steel bid and became a significant financial creditor.

The auditors’ report — at the end of Uttam Galva’s results ended March 31 — said ArcelorMittal Luxembourg and ArcelorMittal India paid $169.04 million and Rs 4,922 crore, respectively, to clear loans, acting as a lender providing financial support to Uttam Galva.

However, Uttam Galva defaulted on the balance of its debt. According to the company’s annual report for 2019-20, it defaulted in principal repayment of Rs 616.05 crore and interest of Rs 81.63 crore, the report cited.

Insolvency and Bankruptcy Code (IBC) rules had previously compelled Mittal to shell out an extra Rs 7,000 crore to clear bank dues of Uttam Galva Steels and KSS Petron where he held some stake and reportedly sold his holdings in one of them for Re 1 a share to become eligible for a bid in Essar Steel.

(With agency inputs)