Shares of Uttam Galva Steels hit a 5 per cent upper circuit limit of Rs 6 apiece on the BSE on Monday amid reports ArcelorMittal is likely to bid for the company, which was admitted to the National Company Law Tribunal (NCLT) recently, and whose co-promoter it once was.
The NCLT Mumbai Bench on October 1 admitted a petition filed by State Bank of India (SBI) under the Insolvency and Bankruptcy Code (IBC), according to a report by Business Standard.
People in the know said ArcelorMittal would bid for the company. However, the company declined to comment. Going through the NCLT route will crystallise Uttam Galva debt for ArcelorMittal, the report added quoting sources.
At 01:05 pm, the stock was frozen at Rs 6 on the BSE as compared to 0.68 per cent rise in the S&P BSE Sensex at 38,962 levels. Shares of Uttam Galva Steels had hit a 52-week high of Rs 10.93 on November 21, 2019 while its 52-week low level stands at Rs 3.62, hit on March 25, 2020.
ArcelorMittal, the world’s largest steelmaker, had taken the bulk of Uttam Galva’s debt to be considered eligible for the Essar Steel bid under the insolvency law and became a significant financial creditor.
The auditors’ report — at the end of Uttam Galva’s results ended March 31 — said ArcelorMittal Luxembourg and ArcelorMittal India paid $169.04 million and Rs 4,922 crore, respectively, to secured financial lenders to clear foreign currency loans, overdue rupee term loans, and working capital loans, together with interest, acting as a lender providing financial support to Uttam Galva.