ArcelorMittal recants, offers just ₹4,554 cr to qualify for Essar bid

ArcelorMittal has offered to pa only ₹4,554 crore to clear the dues of erstwhile group entities Uttam Galva and KSS Petron to make itself eligible to bid for stressed asset Essar Steel. This amount is, however, much less than what the company had committed earlier. It is also lower than what the lenders were hoping to get from ArcelorMittal. This comes even as Essar Steel’s lenders have asked Russian VTB Bank-led consortium Numetal to pay about ₹38,000 crore to become eligible to bid for Essar Steel. Earlier this year, ArcelorMittal had said it had set aside ₹7,000 crore to clear the debts of the two defaulting companies. According to banking industry sources, the overall dues of Uttam Galva and KSS Petron, including interest, work out to ₹13,857 crore. The Supreme Court has told ArcelorMittal to clear all the dues if it wants to bid for Essar Steel. Responding to a letter from Essar Steel’s Committee of Creditors, ArcelorMittal said it intends to pay the dues, including interest, up to February 7 for Uttam Galva and February 9 for Petron to ensure compliance with the timeline stipulated by the Supreme Court judgment. ArcelorMittal was holding a significant stake in the two companies before divesting in February to make itself eligible to bid for Essar Steel. However, the Supreme Court had said the company cannot absolve its liability by selling its stake. Legal experts told that instead of February, the cut-off date for calculating the dues should be when the Supreme Court pronounced the judgment – October 4 — and not when ArcelorMittal sold its stake in both the companies. According to Uttam Galva’s annual report for FY17-18, banks have recalled loans worth ₹12,654 crore, including that of its subsidiaries Uttam Galva Metallics and Uttam Value Steel. ArcelorMittal has offered to pay ₹3,961 crore against these dues. Lenders of KSS Petron, which is undergoing insolvency resolution process, have made a claim of ₹904 crore as of August 2017. The overall dues for KSS Petron, including interest, work out to about ₹1,060 crore and ArcelorMittal wants to settle it with a payment of ₹567 crore.