NCLT reserves order against Uttam Galva Companies

The National Company Law Tribunal (NCLT) held its order on Friday till 26 June in the bankruptcy case filed by SBI (State Bank of India) against BSE-listed Uttam Galva Metallics Ltd and Uttam Value Steel, subsidiaries of debt-laden Uttam Galva Steels Ltd.

Uttam Galva Metallics and Uttam Value Steel owe banks ₹2,200 crore and ₹3,200 crore respectively.

The second-largest state-owned bank of Turkey, Ziraat Bank, has sent a letter to SBI telling that one of their high net worth clients wishes to acquire the assets owned by the two Uttam Galva subsidiaries. This information was provided on Friday by senior counsel J.P. Sen, appearing for the beleaguered steelmakers.

He added that the bank has also communicated regarding this to SBI many times before, but has not got any reply yet.

Sen stated that the total dues of all the lenders are around ₹5,400 crore and the dues od SBI are of ₹334 crore. He told that SBI has not yet reverted back to the communication despite the fact it is representing the joint lending forum.

The partner of law firm Shardul Amarchand Mangaldas representing SBI, Meghna Rajadhyaksha, debated that debtors are just playing delaying tactics now.

She also added that the name of the investor is still not clear; as it is not mentioned in the letter sent by the Turkish bank to the SBI chairman. Moreover, the offer can be taken up to the RP if the company is recognized under the insolvency process for resolution.

M.K. Sherawat, the presiding officer of NCLT’s Mumbai bench, reserved the order till 26 June after hearing all the argument so that the parties can make a settlement of this matter till next Friday.

On 6 June, another board of NCLT had postponed the insolvency case of Uttam Galva Steel to 16 July after several requests from the company as well as the lenders.

The National Company Law Appellate Tribunal is all set to hear an appeal on the insolvency resolution of Essar Steel Ltd, Arcelor Mittal India Pvt. Ltd, which is competing for Essar Steel. They have once owned shares in loan defaulter Uttam Galva and to qualify for the bidding, they have also deposited ₹7,000 crore in an escrow account. If Arcelor Mittal is declared eligible by NCLAT, the money in the escrow account will balance the Uttam Galva’s debt.

Under this insolvency process, Electrosteel Steels was decided, and shareholders received 0.19 paisa per share instead the market price was at Rs 1.10 per share. The shares were finally delisted.

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