NCLT approves CarVal’s bid for Uttam Value Steels

By Beena Parmar

  • 04 May 2020
Credit: Reuters

The National Company Law Tribunal (NCLT) has approved the resolution plan submitted by a consortium of CarVal Investors and UK-based Nithia Capital Resources Advisors to acquire debt-laden Uttam Value Steels Ltd under insolvency proceedings.

The NCLT’s Mumbai bench, in its order on April 30, said the resolution plan submitted by a consortium of CarVal Investors LLP (Carval Funds) and Nithia Capital Resources Advisors LLP stands approved, Uttam Value Steels informed the stock exchanges.

In June 2018,  the Mumbai-based iron and steel manufacturer, along with another associate firm Uttam Galva Metallics Ltd, was admitted for resolution under the Insolvency and Bankruptcy Code (IBC).

While the corporate insolvency resolution process (CIRP) of Uttam Galva Steels was withdrawn by petitioner State Bank of India (SBI) on November 1, 2018, Uttam Value Steels continued to be under the IBC process.

Engaged in the manufacturing of steel and capital equipment products, Uttam Value Steels’ admitted claims as on August-end 2019, stood at Rs 196 crore.

In April 2019, lenders-led by SBI had approved the resolution plan of a consortium of Arcil and CarVal Investors, an arm of US-based food and agriculture group Cargill Inc., which had offered the sum for two stressed units of Uttam Galva – Uttam Value Steels and Uttam Galva Metallics.

However, the only other final bidder Hong Kong-based SSG Capital Management had challenged this approval.

The aggregate defaulted loans, including interest, of the two units of Uttam Galva Steels, stood at Rs 5,561 crore as on March-end 2018.

As on December-end quarter, Uttam Value Steels made a loss of Rs 13 crore as compared with Rs 11 crore in the September quarter. The net loss for the full year ending March 2019 widened to Rs 628 crore from Rs 466 crore in 2017-18.

In June, the Competition Commission of India had approved the proposed joint acquisition of up to 100% of the total issued and paid-up share capital of each of Uttam Value Steel and Uttam Galva Metallics.

Last month, owing to the lockdown due to coronavirus pandemic, Uttam Galva Steels defaulted on Rs 664 crore loans to its lenders. It has an outstanding of Rs 1,008 crore to its creditors including ArcelorMittal. A large part of Uttam Galva’s loans was taken over by ArcelorMittal from public sector banks to bid for Essar Steel in 2018.

JSW Steel Ltd and the UK-based Liberty House had also earlier shown interest in bidding for both the assets but opted to not bid at the final stage.

Founded by former finance director of steel tycoon Lakshmi Mittal-led Ispat International, (a former avatar of Mittal Steel which acquired European steelmaker Arcelor to create ArcelorMittal), Nithia Capital Resources LLP, a London-based alternative investment manager and advisory firm, aims to acquire four to five steel assets in India in coming months.

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