ArcelorMittal places ₹7,000 cr in escrow to pay Uttam Galva dues

Suresh P Iyengar Mumbai | Updated on May 16, 2018 Published on May 15, 2018

ArcelorMittal, the world's largest steel producer, has deposited ₹7,000 crore into an escrow account with State Bank of India to show its commitment towards settling the debt of Uttam Galva Steels and KSS Petron. The move is aimed at establishing ArcelorMittal’s eligibility for Essar Steel bidding, ahead of a crucial National Company Law Appeallet Tribunal hearing on Thursday.

Earlier, the company's highest bid was rejected by the Commitee of Creditors as it was holding a stake in Uttam Galva Steels and KSS Petron, which together had defaulted on their loan of about ₹7,000 crore.

ArcelorMittal spokesperson said the company had written to the Committee of Creditors of Essar Steel in response to the letter received on May 8. Though the details of this letter are confidential, ArcelorMittal maintains that its offer for Essar Steel, submitted on February 12, is eligible.

Any offer to pay outstanding loans of companies where it only had a passive stake with no management or governance role, would be made without prejudice to demonstrate the seriousness of the company's commitment to India and Essar Steel, he said.

“We continue to believe that a swift resolution is in the best interests of ESIL and its stakeholders,” he added.

The committee of creditors will now take this offer on record at its next meeting and verify the eligibility of the bidders, he said.

Earlier, the Ahmedabad bench of the NCLT last month said promoters of defaulting company can repay any outstanding dues and become eligible for the bidding process. Earlier this month, the CoC voted in favour of ArcelorMittal's bid of ₹32,000 crore against Numetal Mauritius' offer of ₹18,000 crore.

Published on May 15, 2018
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