Uttam Galva offers 51% of outstanding loan to avoid asset auction
Uttam Galva Steels Ltd has offered to settle the Rs 5,654 crore loan default by paying 51 per cent the amount upfront to public sector banks so as to abort the auctioning of the company’s assets.
The company, which is part of the Reserve Bank of India’s second list of loan defaulters who have been referred to the bankruptcy tribunal for insolvency proceedings, on March 15 wrote to the State Bank of India (SBI), proposing a “one-time settlement” of all dues of lenders “through an upfront payment mechanism”.
SBI is the largest of the 18 banks which have to recover Rs 5,654 crore from the company. Uttam Galva has offered to pay Rs 2,884 crore upfront to settle with all of them and take company out of insolvency proceedings.
According to the 5-page letter, reviewed by PTI, the company proposed “a one-time settlement (OTS) of the dues of lenders to the extent of 51 per cent of the outstanding claims as on the date of NPA, ie Q1FY17”.
SBI has the highest dues at Rs 1,529 crore followed by Canara Bank – Rs 857 crore and Punjab National Bank – Rs 660 crore.