A subsidiary of ArcelorMittal, the world’s largest steel producer, recently received the National Company Law Tribunal’s (NCLT) approved to acquire the bankrupt Indian Steel Corporation Ltd.
The NCLT cleared the creditors-approved resolution plan of ArcelorMittal’s unit AM Mining India Private Ltd. via an order on 13 April. The order was passed by Kuldip Kumar Kareer and Technical Member Shyam Babu Gautam.
Total consideration amount under the resolution plan is 897 crore rupees ($109.58 million), according to the NCLT’s order.
Following are the key highlights:
Resolution Process Details
Indian Steel Corporation (corporate debtor) was admitted into the corporate insolvency resolution process (CIRP) on 6 October 2021 following a petition filed by India Resurgence ARC Private Ltd.
The committee of creditors later approved the appointment of Ajay Joshi as the resolution professional of the steelmaker.
The estimated average fair value of Indian Steel Corporation was 1,094 crore rupees and the liquidation value was 643 crore rupees. Also, the admitted claim value against the company was more than its liquidation value.
Ajay Joshi received resolution plans from Khandwala Finstock Private Ltd. and AM Mining India in March 2022.
The committee of creditors later approved the revised resolution plan of AM Mining India with full majority.
The NCLT cleared the creditors-approved resolution plan on 13 April.
Financial Details
Out of the total resolution amount of 897 crore rupees, the secured financial creditors will receive 810 crore rupees.
Operational creditors (including workmen and statutory dues) will receive 12 crore rupees, while there will be equity infusion of 75 crore rupees by AM Mining India.
NCLT Orders
NCLT ordered to constitute a monitoring committee, which will be responsible for effective implementation of the resolution plan.
All powers of the board of directors will be exercised by the monitoring committee.
The monitoring committee will comprise former resolution professional, three representatives of AM Mining India and three representatives of the financial creditors.
The resolution professional will hand over all records, premises/documents to AM Mining India to finalize further line of action required for starting the company’s operation as contemplated under the resolution plan.
On payment of entire amount to financial creditors, they will unconditionally release all securities/corporate guarantees provided by Indian Steel Corporation /collaterals owned by the company provided as security against the debt availed.
Indian Steel Corporation -- which operates its production facility in Kutch district of Gujarat state -- makes steel products for automotive, construction, home appliances and general engineering segments, according to its website.
The company supplies cold rolled, galvanized and color coated steel to most of India, as well as exports its products to more than 50 countries in Europe, America, the Middle East and Africa.
AM Mining India is a part of the joint venture between Luxembourg-based Arcelor Mittal and Japan’s largest steel company Nippon Steel Corporation.
(Note: $1 = 81.8545 Indian rupees)
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