Insolvency process: Essar Steel litigation delays Uttam Galva resolution

Banks don't want to wait indefinitely for the resolution of Uttam Galva Steel Limited as the Essar Steel case is expected to be appealed before the Supreme Court by both or either of the bidders

Worried over an inordinate delay in the resolution of Essar Steel’s debt, Indian lenders are taking legal opinion on how to settle the Rs 60-billion debt of Uttam Galva Steels (UGSL). Insolvency proceedings of UGSL is pending before the National Company Law Tribunal (NCLT) in Mumbai since December last.  

The delay in UGSL resolution is because ArcelorMittal, a co-promoter till February this year, has promised to repay the debt, provided it wins the race for another bankrupt company — Essar Steel.

ArcelorMittal was holding a 29 per cent stake in Uttam Galva Steel till February this year and was deemed