ArcelorMittal parks Rs 7,000 cr with SBI to clear Uttam dues

World's largest steelmaker ArcelorMittal has transferred Rs 7,000 crore to SBI to clear bank dues of loan defaulter Uttam Galva Steels so that it becomes eligible to bid for acquisition of Essar Steel, a person in know of the development said.

The move to park about Rs 7,000 crore in an escrow account of State Bank of India (SBI) follows ArcelorMittal's bid for Essar Steel coming in for questioning because of its past shareholding in loan defaulter firm, Uttam Galva Steel.

The insolvency and bankruptcy rules bar a delinquent promoter from bidding for a company or asset that is being auctioned to recover bank dues.

The persons said the funds in escrow account can be used to pay off outstanding dues of Uttam Galva Steel as well as KSS Petron Ltd.

When contacted, ArcelorMittal refused to comment on transfering of about Rs 7,000 crore but said: "Any offer to pay any outstanding loans of companies where we only had a passive stake with no management or governance role, would be made without prejudice to demonstrate the seriousness of our commitment to India and Essar Steel India Ltd (ESIL)."
When contacted, the company confirmed it had written to CoC but said "the details of this letter are confidential."