Mon. May 13th, 2024
Essar Steels

State Bank of India will take the decision soon against the three defaulters— Essar Steel, Bhushan Steel, and Electrosteel Steels. These three borrowers constitute nearly half the loans of the top 12 defaulters which Reserve Bank of India has identified. RBI has made effort to clean up bad loans. The borrowing companies have to repay the loan worth ₹ 1 lakh crore as the 12 accounts constitute ₹ 2.5 lakh crore of the total bad loans in the banking system.

The meeting between the lenders and borrowers is scheduled on Thursday for the discussion of the losses the banks would have to incur in reorganizing these loans and the amount of equity that promoters will have to bring in.

Senior SBI official said, “The fate of the three large steel companies will be sealed soon. Lenders will seek the mandate from the consortium to file for corporate insolvency”. SBI who is the lead bank of all these three companies has called a meeting of the joint lenders forum(JLF).

Essar Steel has ₹45,000 crores, Bhushan Steel has ₹ 47,000 crores and Electrosteel Steels with ₹ 11,000 crores as the outstanding loans in the bank.

While leaders on Wednesday have decided to move an application to the National Company Law Tribunal (NCLT) to initiate corporate insolvency on ABG Shipyard, Alok Industries, and Jyoti Structures.

SBI received a mandate from the lenders to file for insolvency for Alok Industries that has outstanding loans of Rs 22,000 crore and Jyoti Structures that has borrowed Rs 5,100 crore loans. ICICI Bank, which is the lead bank for ABG Shipyard, received a mandate from the consortium of 22 lenders to prepare a resolution plan on Rs 6,900 crore loans.
Bankers are holding the meeting among themselves to find out resolution plans after the central bank ordered lenders to initiate insolvency proceedings on 12 accounts.
Once an account is admitted to the NCLT, the board is dissolved and an insolvency professional is appointed to look after the day-today business while lenders and borrowers have to finalise the resolution within 180 to 270 days, failing which NCLT will allow liquidation of the assets.

By Bharat