Several Firms Interested in Uttam Galva Assets - Report
Uttam GalvaUttam Galva

Several Firms Interested in Uttam Galva Assets - Report

Times of India, citing unnamed sources, reported that many firms including AMNS India, JSW Steel, ESL Steel & Kotak Mahindra’s Phoenix Asset

Times of India, citing unnamed sources, reported that many firms including AMNS India, JSW Steel, ESL Steel & Kotak Mahindra’s Phoenix Asset Reconstruction Company have shown an interest in Uttam Galva Steels, which has been put on the block by lenders. State Bank of India had initiated bankruptcy proceedings against Uttam Galva at the Mumbai bench of the National Company Law Tribunal in March 2020, after it defaulted on an external commercial borrowing of USD 6.7 million. Six months later, the NCLT admitted SBI’s petition on October 1, 2020 and appointed Mr Milind Kasodkar of law firm KMDS & Associates to oversee Uttam Galva’s affairs and conduct its bankruptcy proceedings.

Uttam Galva, founded by Mr Rajendra Miglani, is among the largest makers of value added steel in western India with facilities located at Khopoli, about 75km from Mumbai. Value added steel is used in automobiles, aerospace and consumer durable industries. According to earlier media reports, Uttam Galva has CR capacity of 720,000 tonnes, HDG of 600,000 tonnes and 180,000 tonnes of color coating. As per ToI report, the company posted a loss of INR 140 crore on revenue of INR 277 crore in the first six months of FY20.

ArcelorMittal became a co promoter of Uttam Galva in 2009 by acquiring 29% stake. Uttam Galva Steels began defaulting on loans in 2017 and became an impediment in ArcelorMittal's Essar Steel bid and ArcelorMittal sold its stake to the Miglanis in 2018 so that it could bid for other stressed Indian steel assets that were being auctioned under the bankruptcy proceedings. It also had to take on the bulk of the stressed Uttam Galva’s debt to be eligible to bid for bankrupt Indian steel assets. ArcelorMittal through two entities has an exposure of INR 7,922 crore to Uttam Galva’s liabilities. It has 87.2% vote among financial creditors, 71.5% through ArcelorMittal India and 15.9% through AMNS Luxembourg.

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