CarVal Investors has $10 billion in assets under management and is the investment arm of global agricultural powerhouse Cargill.
Ending months of uncertainty following the initiation of bankruptcy proceedings against Uttam Galva Metallics and Uttam Value Steels, lenders led by State Bank Of India have selected the bid submitted by a consortium led by CarVal Investors for the twin stressed assets, three individuals familiar with the decision told Moneycontrol.
CarVal Investors has $10 billion in assets under management and is the investment arm of global agricultural powerhouse Cargill. Uttam Galva Metallics & Uttam Value Steels are arms of parent company Uttam Galva Steels, which had wriggled out of insolvency after Arcelor Mittal cleared the former's dues to become eligible to bid for Essar Steel.
"The Committee of Creditors (CoC), led by SBI, has picked the proposal submitted by CarVal Investors & Asset Reconstruction Company India (ARCIL) and they are now the selected bidder. They have edged out the rival consortium led by SSG Capital Management," said one of the sources cited above. A second source confirmed the decision to Moneycontrol.
"The bid value was around Rs 2300 crore with an upfront cash payment component of around Rs 800 crores. On or before 7th May, 2019, the resolution professional of both the stressed accounts has to submit the selected plan to the National Company Law Tribunal, Mumbai," added the third source.
Uttam Galva Metallics & Uttam Value Steels owe around Rs 5,500 crore to lenders, which include SBI, Punjab National Bank, Bank of Baroda, Canara Bank and Corporation Bank amongst others. Uttam Value Steels Ltd is a manufacturer of flat steel products and has a plant in Wardha, Maharashtra. The Uttam Group derives synergies from the combined operations of the iron making ( hot metal) facility in Uttam Galva Metallics with the steel plant of Uttam Value Steels. The Uttam Galva Metallics facility is adjacent to the Uttam Value Steels plant and is the key raw material supplier to the latter. Moneycontrol is awaiting an email response from SBI, CarVal Investors and Uttam Value Steels and will update this article as soon as they come in.
CarVal Investors is a leading global alternative investment manager focused on distressed and credit-intensive assets and market inefficiencies. It was founded by Cargill in 1987 and has invested $114 billion in 5,340 transactions across 80 countries. Currently, CarVal Investors has $10 billion in assets under management in both credit and real estate strategies.
In October 2018, the world's largest steelmaker Arcelor Mittal became the sole financial creditor of Uttam Galva after paying off outstanding dues of around Rs 7,469 crores to overcome a legal hurdle under the insolvency and bankruptcy code and become an eligible bidder for Essar Steel.India's finished steel consumption is anticipated to increase to 230 million tonnes by 2030-31 from 90.68 million tonnes in 2017 -18 according to the National Steel Policy 2017.
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