Prince Mathews Thomas Moneycontrol News
Uttam Galva Steel has offered to repay all its debt to State Bank of India, if its main lender agrees to keep the company away from National Company Law Tribunal (NCLT) for a resolution.
At a hearing of the Mumbai bench of the NCLT, the company asked for four to five weeks of time, saying that it plans to get a foreign investor to shore up its funds.
The company has a total debt of Rs 5,654 crore.
The debt-laden steel maker, which is part of the Reserve Bank of India's second list of loan defaulters that have been referred to the bankruptcy tribunal for insolvency proceedings, had earlier offered its lenders to pay 51 percent of its outstanding loan. But SBI had turned down the offer, insisting on full repayment.
A source close to the company confirmed the development, but didn't respond to query on possible investors.
Lenders had also suggested that ArcelorMittal continues to have responsibility regarding a secured loan of Rs 1,400 given to Uttam Galva.
As reported earlier, minority shareholders of Uttam Galva had written to the lenders asking if permission was given to ArcelorMittal to divest its stake in the company.
"Arcelor was permitted to sell its shares to the other sponsors only if no event of default had occurred," the minority shareholders said in their letter. "The company agreed that it would not recognize or register any transfer of the shares held by ArcelorMittal without the approval of State Bank of India," they said.
The stake sale became necessary after an amendment in the IBC barred promoters of defaulting companies from bidding for stressed assets. ArcelorMittal exited Uttam Galva and got itself declassified as its promoter, in order to bid for Essar Steel.
A source close to ArcelorMittal, however, had said that the company was not obliged to seek permission from Uttam Galva's lenders to sell its stake.
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