Essar Steel insolvency case: ArcelorMittal to pay Rs 7,469 cr to clear Uttam Galva, KS Petron dues
After losing their case in NCLT and NCLAT, ArcelorMittal had moved the Supreme Court, which on 4 October had allowed them to bid for Essar Steel provided they cleared their dues to their lenders.
Mumbai: Following the 4 October Supreme Court order linking its eligibility to bid for Essar Steel through bankruptcy courts, ArcelorMittal Wednesday said it will pay Rs 7,469 crore to the financial creditors Uttam Galva and KSS Petron, its two domestic subsidiaries from which it had claimed to have exited.
The NRI Laxmi Mittal-owned company, which is the world's largest steelmaker, which has been on a murky legal battle with other bidders, especially the Russian VTB Bank-promoted NuMetal, had on 2 April submitted a proposal to take over Essar Steel.
Of the Rs 7,469 crore payment, around 80 percent will be used to settle the dues of Uttam Galva and the rest 20 percent for KSS Petron, the company said.
ArcelorMittal has reportedly submitted Rs 42,000 crore to the 10-million-tonne alloy mill in Gujarat, which is one of the newest steel mills set up by Essar Steel, which owes over Rs 45,000 crore to a clutch of lenders.
"Our board believes that Essar Steel represents a unique and compelling opportunity for us to establish a significant footprint, with substantial expansion potential, in the high-growth Indian steel market.
"Given the significant benefits that Essar Steel would bring to ArcelorMittal, making this payment is an appropriate course of action under the circumstances," ArcelorMittal said in a statement.
As per the Supreme Court ruling, Essar Steel creditors now have an eight-week period to accept what it considers to be the best resolution plan from eligible applicants.
ArcelorMittal and Numetal, which was initially promoted by Revant Ruia's shell company and subsequently exited and taken over by the Russian lender VTB Bank and some others, have been in a bitter court battle to establish their eligibility to bid for the steel plant.
After losing their case in NCLT and NCLAT, they had moved the Supreme Court, which on 4 October had allowed them to bid provided they cleared their dues to their lenders.
ArcelorMittal is the world's leading steel and mining company, with a presence in 60 countries and an industrial footprint in 18 countries. When it comes to coal mining, it is the fifth largest globally.
In 2017, ArcelorMittal had revenue of $68.7 billion and crude steel production of 93.1 million tonne, while own iron ore production stood at 57.4 million tonne.
ArcelorMittal is listed on the stock exchanges of New York, Amsterdam, Paris, Luxembourg apart from the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia.
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