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Bank of America ML bids for part of SBI’s Essar Steel debt - Report

Steel News - Published on Tue, 12 Feb 2019

Image Source: Bank of America Merrill Lynch
ET, citing people familiar with the matter, reported that Bank of America Merrill Lynch emerged as the sole bidder in State Bank of India’s auction of its loans to bankrupt Essar Steel, but it bid for only a part of the INR 13,000 crore loans the lender put on the block. Source told ET that Bank of America Merrill Lynch has bid for about one-sixth of the loans that were up for sale, and is said to have offered INR 1,300-1,500 crore. It is unclear whether SBI would accept the bid as there was no competition.

The lender had said in the sale document that it might exercise the right not to go ahead with the sale at any stage.

The poor response at SBI’s auction was on account of the clawback option mentioned in the sale document, one of the people said. Under this, investors will have to pay more than the INR 9,588-crore reserve price fixed by the lender if the ongoing resolution of Essar’s debt takes place in less than a year.

SBI’s loans to Essar were under different heads: including working capital, term loans and corporate loans. It had total outstanding loans of INR 15,431 crore to the firm.

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Posted By : Ratan Singh on Tue, 12 Feb 2019
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