Lenders to the distressed steel assets of Uttam Value Steels and Uttam Galva Metallics on Sunday approved a Rs 2,400-crore resolution package in a staggered payment plan that requires banks to take haircuts of more than 60% on the loans.
Two people aware of the resolution plan said the offer includes equity commitment of Rs 100 crore. Of the total amount, about Rs 650 crore will be paid immediately, with the remaining spread over the next five-six years, said one of the executives aware of the payment plans.
A consortium of lenders, led by State Bank of India (SBI), has Rs 6,113 crore of loans outstanding in these two accounts. Other banks with significant exposure to the assets include Punjab National Bank, Canara Bank and Andhra Bank.
The resolution professional, Rajiv Chakraborty of PwC, now has until May 7 to get the plan of CarVal Investors and Asset Reconstruction Company of India (Arcil) approved by the dedicated bankruptcy court.
An email sent to Chakraborty remained unanswered.
Focused on distressed and credit-intensive assets, CarVal is the investment arm of food and agriculture conglomerate Cargill, which is also the biggest closely held US company by revenue.
Its earlier offer was around Rs 2,000 crore.
The assets, which are associate companies of Uttam Galva Steels, comprise onemillion tonne hot-rolled production capacity of Uttam Value Steels at Wardha in Maharashtra, for which the former purchases pig iron from Uttam Galva Metallics.
Utilisation levels could be raised to the rated capacity in six months, a person aware of the developments said.
JSW Steel and Liberty House had earlier sought to invest in these assets. However, final bids came in only from CarVal and another consortium led by SSG Capital Management.
The 270-day deadline for the assets ended on April 3 but the company got 20 more days to complete the resolution.