ArcelorMittal, a Luxembourg-based multinational steel manufacturing corporation, has agreed to settle the dues of the financial creditors of Uttam Galva Steels Ltd and KSS Petron Pvt Ltd. The debt runs to the tune of Rs 7,469 crore. This will make ArcelorMital eligible to bid for the assets of the bankrupt steel major, Essar Steel Ltd.

This eligibility requirement was mandated by the Supreme Court of India, as an exception in the Essar Steel case. This would prevent Essar from going the liquidation route where the recoveries for many PSBs (Public Sector Banks) would be lower.

Faster resolution and highest recovery of dues are some of the major objectives of Insolvency and Bankruptcy of India (IBC). The Essar Steel case is pending with the National Company Law Tribunal, as part of the process defined in the IBC. It was enacted in 2016, is one of the flagship legislation of the current government to provide for the faster resolution of defunct companies.

The company said. “ArcelorMittal announces that in line with the Indian Supreme Court ruling dated 4 October 2018, it has approved a payment of Rs 7,469 crore (approximately $1 billion) to the financial creditors of Uttam Galva and KSS Petron to clear overdue debts in order that the offer it submitted for Essar Steel India Ltd (ESIL) on 2 April 2018 is eligible and can be considered by ESIL’s Committee of Creditors (CoC).”