indian steel: Bankruptcy court clears ArcelorMittal unit’s plan for Indian Steel Corp

Mumbai: A bankruptcy court on Thursday approved the application of the world’s largest steelmaker, ArcelorMittal, to acquire Indian Steel Corp.

The Mumbai bench of the National Company Law Tribunal (NCLT), comprising judicial member Kuldip Kumar Kareer and technical member Shyam Babu Gautam, cleared ArcelorMittal subsidiary AM Mining Pvt Ltd’s revival plan for Indian Steel.

The detailed order was not available till the time of filing the story.

Indian Steel has admitted financial debt of more than Rs 2,700 crore. Last year in May, ET reported that the subsidiary of Lakshmi Mittal-promoted ArcelorMittal had offered an upfront payment of Rs 800 crore to lenders. This would equate to about 30% of the money it owed financial creditors.

Maharashtra-based Indian Steel Corp was admitted for debt resolution in October 2021, after Bain Capital and Piramal Enterprises-backed India Resurgence Asset Reconstruction Company initiated bankruptcy proceedings against it. India Resurgence ARC holds 72%, or Rs 1,945 crore, of the company’s debt.

The ARC had acquired the debt from various banks, including Rs 929 crore of debt from State Bank of India in May 2019. Punjab National Bank holds 20% of the debt, while Jammu & Kashmir Bank has 6%. Other financial creditors are IDBI Bank and Union Bank of India, according to the company’s website.

“In view of the plan being approved, the dues of the Indian Steel creditors will be paid as per the resolution plan and the monitoring committee will look after the implementation of the resolution plan,” said Ashish Pyasi, an associate partner of law firm Dhir & Dhir Associates. “All the creditors including statutory authorities will have to abide by the resolution plan.”This will be ArcelorMittal’s fourth acquisition of stressed assets in India. In partnership with the Nippon Steel group, it had acquired Essar Steel in December 2019 for Rs 42,000 crore, implying over 90% recovery for lenders. It then bought Odisha Slurry Pipeline Infrastructure for about Rs 2,350 crore.

In October last year, the bankruptcy court approved AM Mining India’s resolution plan for Uttam Galva Steels. The proposal envisaged repaying Rs 4,050 crore, including to financial and operational creditors, and an equity infusion of Rs 320 crore.