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Top 5 steel firms need to pay INR 29,000 crore to bid

Steel News - Published on Thu, 07 Dec 2017

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Business Standard reported that promoters of five steel majors undergoing insolvency resolution will have to cough up a total of at least INR 29,000 crore to be eligible to submit bids and retain their companies. Some other companies trying to resolve their bad loans under the Insolvency and Bankruptcy Code (IBC) are seeking details from lenders about the principal and interest they have to pay for being able to bid for their own assets.

The recent amendments to the IBC practically barred promoters from re-acquiring their own assets, leaving only a small window to convert their non- performing assets into standard assets by paying the over dues. According to steel companies, which have had discussions on this issue with lenders, the overdue includes the principal in default along with interest which has not been paid unless the lenders have recalled the entire loan.

As per report, , according to those who have shown interest in bidding for the asset, the overdue amount based on this definition is estimated at
Bhushan Power – INR 10,000 crore
Bhushan Steel - INR 6,000 crore
Electrosteel Steels - INR 2,500 crore
Essar Steel - INR 7,000 crore,
Monnet Ispat - INR 3,500 crore

The estimated payout by these companies will be little more than a fifth of their total debt pegged at around INR 138,177 crore as of financial year 2016.

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Posted By : Nanda Koijam on Thu, 07 Dec 2017
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