According to media reports, Nithia Capital and CarVal Investors have acquired the distressed steel plants of Uttam Galva Metallics Ltd and Uttam Value Steel Ltd through their Singapore based Joint Venture Holding Company, Wardha Steel Holdings Pte Ltd for INR 2000 crore. Mr Johannes Sittard, Chairman and Founding member of Nithia Capital, has been appointed Chairman of Wardha Steel and Mr Jai Saraf, Founder and CEO of Nithia Capital, has been appointed Chairman of Uttam.
The plan of Nithia Capital and CarVal is to increase Uttam’s primary steel-making capacity by 50 per cent in the immediate future by investing in partially completed projects in a timely and cost-effective manner. Mr Jai Saraf said “The acquisition of Uttam is an important and strategic step for Nithia Capital. Nithia envisions creating a consolidated steel operating platform of up to 2 million tonnes of steel production per year in India through acquisition and organic growth. We have been looking at multiple steel acquisition opportunities in India over the last few years and we are confident that we will continue to grow and build further on the success of Uttam. We consider India to be the engine of growth for world steel for the next 20-25 years, and it is our intention to actively participate in this process."
The acquisition under the Insolvency and Bankruptcy Code was approved by the National Company Law Appellate Tribunal in September. The two companies, which had outstanding dues of over INR 7400 crore, were recommended for corrective action by the RBI in its second list of large defaulters. State Bank of India and Union Bank of India were the lead bankers. In June 2018, both the companies were admitted for insolvency proceedings after they defaulted on loan extended by Union Bank and SBI. Resolution professional had admitted claim of INR 4,176 crore of Uttam Galva Metallics and INR 3,014 crore of Uttam Value Steel. The NCLT then approved the CarVal Investors and Nithia Capital consortium for a resolution plan. However, five operation creditors, who had to take 99 per cent haircut, moved NCLT and then the Supreme Court, which turned down their plea. Last September, the National Company Law Appellate Tribunal cleared the last hurdle for the execution of the deal by dismissing the appeal of the operational creditor against the bid.
Uttam is an integrated mid sized flat steel producer with annual capacity of 0.7 million tonnes of crude steel. Its facilities are located near Nagpur with captive railway siding, enabling reach to all major markets countrywide and proximity to Iron ore