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Lenders fail to sell Essar Steel loans due to delays - Report

Steel News - Published on Thu, 25 Apr 2019

Image Source: SteelGuru
DNA, citing some bankers, reported that the inordinate delay in the bankruptcy courts is making it difficult for banks to sell loans extended to Essar Steel and most of the 17 banks in the consortium are willing to sell off their exposure, but the bidders who once saw some prospects are shying away from buying it. Bankers say the delays are causing uncertainty over the recovery of money. DNA quoted banker as saying that "The vendors and the oil companies, which are contesting their claims, have been getting regular payment from the company, which is a going concern, but the bankers' money is stuck without any interest. We were close to concluding the deal with a bidder, but then the issue of payment to the operational creditors cropped up and the bidder walked away.”

Banker said "It is over 600 days since the case was first referred to NCLT. The company featured in the first list of stressed loans that RBI had mandated banks to find a resolution or change the management.”

Last month two banks, Bank of India and Central Bank of India had put their exposures of Rs 1,978 crore and Rs 423 crore, respectively, on sale, but were not able to conclude a deal. Even State Bank of India, the lead lender, had put its INR 15,400 crore of loans on sale in January 2019 despite being the leader of the consortium, but subsequently the bank withdrew the sale.

The resolution process, which started from NCLT Ahmedabad and was heard in the Supreme Court twice, is now with the National Company Law Appellate Tribunal. The tribunal is still deciding the distribution of the funds. On April 23, NCLAT requested the banks to offer a better deal to the operational creditors.

Source :

Posted By : Sanju Moirangthem on Thu, 25 Apr 2019
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