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Financial institutions set to realise INR 80,000 crore from IBC in 2019-20 - ICRA

Steel News - Published on Fri, 10 May 2019

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ICRA said that banks and financial institutions are expected to realise more than INR 80,000 crore in 2019-20 from resolution of stressed assets under the Insolvency and Bankruptcy Code as compared to INR 66,000 crore in the previous fiscal. It said “The higher realisation in the current fiscal will be driven by the expected conclusion of the Corporate Insolvency Resolution Process of two large accounts Essar Steel Limited and Bhushan Steel and Power Limited.”

Both these accounts are part of the RBI’s list of the 12 largest defaulting companies announced in June 2017, it added. Successful completion of the CIRP for these two accounts would bring closure to eight companies from the RBI’s list and could help strengthen the confidence in the IBC, despite the significant delays seen in in the process with most of the CIRPs lasting more than 500 days, it said.

During the last financial year, cases resolved under the IBC include Electrosteel Steel, Monnet Ispat Ltd and Amtek Auto Ltd. The progress of the CIRP under the IBC has been hampered over the past two years by the over-burdened NCLTs, innumerable litigations, defiant promoters and failing sectors, it said, adding even then, the process under the IBC has chugged on, albeit at a slower pace than envisioned. As of March 31, 2019, 715 cases of defaulting corporate debtors had been closed under the IBC. Of the same, a significant portion of corporate debtors (378 cases) were ordered into liquidation, while only 92 CIRPs yielded a resolution plan where the companies continue to operate as going-concerns, it said.

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Posted By : Ratan Singh on Fri, 10 May 2019
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