NCLT approves Arcelor Mittal resolution plan for Uttam Galva

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The National Company Law Appellate Tribunal (NCLT), Mumbai has approved the Rs 4,050-crore resolution plan submitted by an Indian arm of global steel behemoth Arcelor Mittal for debt-ridden Uttam Galva Steels, multiple industry sources familiar with the matter told Moneycontrol. The detailed copy of the tribunal’s order is awaited.

This is Arcelor Mittal’s third  purchase through the insolvency process in India after Essar Steel and Odisha Slurry Pipeline Infrastructure. The firm could not be contacted for an immediate comment.

In October 2020, the NCLT had admitted an insolvency petition against Uttam Galva in a plea filed by State Bank of India. In June, 2021, the lenders of the indebted firm had unanimously approved the resolution plan submitted by the Lakshmi Mittal promoted steelmaker. Other rivals like JSW Steel and Jindal Steel & Power had also submitted expressions of interest earlier for Uttam Galva.

In 2018, when ArcelorMittal's bid for Essar Steel was being considered, the apex court had held that the steel giant would have to clear all non-performing loans of companies where it held stakes. Subsequently, the firm cleared dues of many lenders of Uttam Galva Steels and become its largest creditor. It also sold its 30 percent stake back to Uttam Galva's promoters to be eligible for the Essar Steel bid.

ArcelorMittal: Bullish on India

Banking on strong consumption growth in India, ArcelorMittal-Nippon Steel India plans to spend $5.1 billion at its Gujarat plant to boost crude steel capacity to 15 million tonnes by 2026.

The venture between ArcelorMittal SA and Nippon Steel Corporation currently has a capacity of 7.6 million tonnes. The company said in a presentation to its investors that it has aimed to add another one million tonnes by March 2024 by creating efficiencies at the existing plant.