The subsidiaries of Uttam Galva Steels — Uttam Value Steel and Uttam Galva Metallics — owe banks Rs 3,200 crore and Rs 2,200 crore respectively
The Mumbai bench of the National Company Law Tribunal (NCLT) has admitted that State Bank of India (SBI) has filed an insolvency petition against Uttam Value Steel Ltd, reported Mint.
The subsidiaries of Uttam Galva Steels — Uttam Value Steel and Uttam Galva Metallics — owe banks Rs 3,200 crore and Rs 2,200 crore respectively. The NCLT bench will hear the bankruptcy plea against Uttam Galva Metallics on July 11.
Presiding officer MK Shrawat has approved Rajiv Chakraborty as interim resolution professional (IRP), the report said.
SBI had approached NCLT after Uttam Value Steel had defaulted on Rs 334 crore. Meghna Rajadhyaksha, who represents SBI, informed the tribunal that after the declaring the loan as non-performing assets, there has not been any enhancement of loans.
The presiding officer said the bench had noted that banks were not recalling loans after declaring them as non-performing. “We will ask the resolution professional (RP) about what has transpired in such accounts,” Shrawat told the paper.
On Monday, the National Company Law Appellate Tribunal (NCLAT) had refused to direct the Mumbai bench of NCLT to defer its pronouncement on SBI’s appeal seeking initiation of insolvency plea against Uttam Value Steel and Uttam Galva Metallics Ltd.
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The firm intends to challenge the order in higher courts, a person aware of the development told the paper.
On June 6, another bench of NCLT had adjourned the insolvency plea of Uttam Galva Steel to July 16, following requests from the company as well as its lenders. The subsidiaries of debt-laden Uttam Galva Steels had said that Turkey lender Ziraat Bank wrote to SBI that one of their high-net worth clients was interested in acquiring their assets.
The NCLAT is set to hear a petition on the insolvency resolution of Essar Steel Ltd. ArcelorMittal India Pvt Ltd had transferred Rs 7,000 crore into an escrow account of SBI to show its intent in clearing the eligibility hurdle. If NCLAT considers ArcelorMittal's bid as eligible, the money in the escrow account will go towards settling Uttam Galva’s debt.