SBI asks NCLT to withdraw insolvency proceedings against Uttam Galva Steel

SBI asks NCLT to withdraw insolvency proceedings against Uttam Galva Steel

New Delhi, Nov 1: The State Bank of India has moved the National Company Law Board to withdraw insolvency proceedings against Uttam Galva Steel.
The move comes after ArcelorMittal’s decision to pay off the dues of Uttam Galva, a condition for the largest steelmaker in the world to become eligible to bid for Essar Steel.
A top executive from Uttam Galva confirmed the development but declined to give further details.
State Bank of India had taken the company to bankruptcy courts last year after Uttam Galva defaulted on debt repayments. The public sector bank is the lead lender to Uttam Galva, which had debts of about Rs 6,000 crore.
Eighteen banks, led by State Bank of India, have loaned to Uttam Galva.
ArcelorMittal has agreed to pay Rs 7,469 crore to clear dues of Uttam Galva and KSS Petron. The steel major was a significant shareholder in both the companies and despite exiting them, was asked by the Supreme Court to clear dues.
Clause 29A of the Insolvency and Bankruptcy Code prevents promoters of defaulting companies from bidding for stressed assets.
But it remains to be seen if the payment will now lead to a change in ownership of Uttam Galva Steel.
ArcelorMittal has indicated it is a ‘significant financial creditor’ of Uttam Galva and is exploring options to take over the reigns. Uttam Galva, owned by the Miglani family, specialises in cold rolled steel and has an annual capacity of 1.2 million tons.

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