ArcelorMittal group gets NCLT nod to acquire Uttam Galva Steel

The Mumbai bench of the National Company Law Tribunal (NCLT) has given its approval to Rs 4,000-crore resolution plan submitted by AM Mining India Pvt Ltd, a subsidiary of ArcelorMittal group, for Uttam Galva Steel.

This brings the end of the two-year old Corporate Insolvency Resolution Process of Uttam Galva Steel, the Mumbai-based manufacturers of downstream value-added steel products.

Earlier, the Committee of Creditors (CoC) had approved the resolution plan submitted by AM Mining India Pvt Ltd with a 100% vote share. Other major steel manufactures such as JSW and Jindal Steel and Power Ltd had also bid for Uttam Galva.

The NCLT approved the resolution plan submitted by the ArcelorMittal group without any changes or amendments, and rejected all challenges to the plan. 

The delisting of the Utaam Galva’s equity shares will take place after the Resolution Plan gets NCLT nod. “The provisions relating to providing an exit opportunity under the Delisting Regulations are not applicable to the delisting of equity shares of the Corporate Debtor,” the company informed the exchanges.

State Bank of India had dragged Uttam Galva into the insolvency process after it filed an application with the NCLT for initiating CIRP against the steel company after it defaulted on a payment of Rs 110 crore. The NCLT admitted the application in October 2020.  

Uttam Galva owed Rs 9,340 crore to financial creditors. ArcelorMittal India Pvt Ltd was the largest financial creditor accounting for 69.35% of the total due amount.

This is third acquisition by the ArcelorMittal group through the insolvency process in India. ArcelorMittal had earlier acquired Essar Steel in collaboration with Nippon Steel for a sum of Rs 41,000 crore in 2018. It also acquired Odisha Slurry Pipeline Infrastructure for Rs 2,350 crore in 2020.

Also see: Nithia Capital and CarVal complete acquisition of Uttam Galva Metallics, Uttam Value Steel

Uttam Galva Steel is engaged in the business of manufacturing downstream value-added steel products in India. The Company procures hot rolled steel (HR) and processes it into cold rolled steel (CR) and further converts them into galvanized steel and colour-coated coils.

The company posted a total loss of Rs 250 crore in 2021-22. In the 30 June 2022 quarter, the company posted a total revenue of Rs 242 crore compared to Rs 198 crore in the same period previous year. Net losses during the 30 June 2022 quarter was at Rs 50 crore compared to Rs 75 crore in the same quarter previous year.