State Bank of India rejects out-of-court settlement for Uttam Galva

Uttam Galva was admitted for proceedings under IBC on March 15

Uttam Galva Steel’s out-of-court settlement offer to pay State Bank of India (SBI) 51 per cent of dues has been rejected, lawyers told the National Company Law Tribunal’s Mumbai Bench. 

The Bench of Justice Duraiswamy and Justice BSV Prakash Kumar heard the petition filed by SBI against Uttam Galva. 

The steel company defaulted on (around) Rs 14.86 billion, out of a total Rs 18.32-billion loan advanced by SBI.  In total, the company owes Rs 61.92 billion (FY17), and had made an offer of 51 per cent to settle the entire loan amount to the public sector banks. 

Uttam Galva was admitted for proceedings under the Insolvency and Bankruptcy Code (IBC) on March 15. 

SBI told the Bench that they would agree to an out-of-court settlement only if 100 per cent of the defaulted amount was paid. 

The Bench has asked all parties to file written submissions and will hear the matter on Thursday.

The counsel for the steelmaker told the Bench that Uttam Galva had made an offer to pay SBI 51 per cent of the defaulted amount (Rs 7.58 billion), while the bank in reply said that they were unhappy with the proposal.