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Exclusive | ArcelorMittal writes to Essar Steel lenders, indicates willingness to pay off Uttam Galva dues

Uttam Galva Steels' dues amount to about Rs 8,000 crore, including the outstanding interest payments.

May 14, 2018 / 10:34 PM IST
Essar Steel

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ArcelorMittal has written to Essar Steel lenders, for the first time indicating that it may pay off dues of Uttam Galva Steels to clear the eligibility hurdle.

Three sources confirmed the development to Moneycontrol.

"Yes, ArcelorMittal has written to all the banks asking the due amount required to clear their name," a source said on condition of anonymity.

"They've also maintained that they are not 'legally obligated' to pay but will clear off the dues as a goodwill gesture," added the source.

Uttam Galva Steels' dues amount to about Rs 8,000 crore, including the outstanding interest payments.

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With the banks responding positively, another executive added that ArcelorMittal will again write to the lenders on Tuesday, this time putting forth its offer.

With the dues paid, and the eligibility hurdle cleared, ArcelorMittal will emerge as the higher bidder as the company had bid more than Numetal in the first round of auction.

Late April, it had emerged that ArcelorMittal had offered Rs 32,000 crore for Essar Steel, while VTB Bank-led Numetal had bid Rs 18,000 crore.

A source close to Uttam Galva Steels reiterated the company is keenly watching the developments. Asked about a possible change in the ownership  "Everything is in the open now," said the executive.

The lenders may wait for the NCLAT hearing on May 17, where both the bidders have challenged their disqualification, before taking a final call.
Prince Mathews Thomas heads the corporate bureau of Moneycontrol. He has been covering the business world for 16 years, having worked in The Hindu Business Line, Forbes India, Dow Jones Newswires, The Economic Times, Business Standard and The Week. A Chevening scholar, Prince has also authored The Consolidators, a book on second generation entrepreneurs.
first published: May 14, 2018 10:34 pm

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