About Rs 65,000 crore is stuck in just three cases where the court had approved the final bidder – Essar Steel, Alok Industries and Bhushan Power and Steel
Retail investors in bank stocks will see the profits of the public sector banks remaining depressed as lenders are yet to get back money from large corporate accounts that were referred to the National Company Law Tribunal (NCLT).
Essar Steel, in which ArcelorMittal will pay Rs 42,000 crore, is stuck for close to 700 days from the day it was first referred to the NCLT.
About Rs 65,000 crore is stuck in just three cases where the court had approved the final bidder – Essar Steel, Alok Industries and Bhushan Power and Steel. JSW Steel is the sole bidder for Bhushan Power and Steel, but the case is stuck in various stages of litigation.
A LONG WAIT
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- About Rs 65,000 crore is stuck in just three cases where the court had approved the final bidder – Essar Steel, Alok Industries and Bhushan Power and Steel
- Essar Steel, in which ArcelorMittal will pay Rs 42,000 crore, is stuck for close to 700 days from the day it was first referred to the NCLT
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A senior banker said, "ArcelorMittal has agreed to pay Rs 42,000 crore, for which they may have lined up credit from foreign banks. They cannot keep the limits open until the litigations are over. If the litigations were sorted out, about Rs 65,000 crore would have come from just three cases."
It is close to 700 days that Essar Steel was first referred to the NCLT in August 2017. Lenders to debt-laden Essar Steel filed a petition in the Supreme Court last week to appeal against the bankruptcy tribunal's order, which said the secured and the unsecured creditors of the company should be treated at par. The case will now be decided in Supreme Court. The bankruptcy court also approved ArcelorMittal's Rs 42,000 crore bid for the acquisition of EssarSteel after it rejected the original promoters Ruias' plea to establish the eligibility of the bidder.
JSW had offered to pay Rs 19,000 crore to Bhushan Power and Steel, bettering Tata Steel's offer of Rs 17,000 crore. The bids were stalled after Allahabad Bank reported a fraud of Rs 1,774 crore to Reserve Bank of India. However, JSW Steel told NCLT on June 16 that the company is not backing out from the ongoing resolution process of Bhushan Power and Steel despite the fraud reports.
The Ahmedabad bench of NCLT on March 7 had given a conditional approval to the Rs 5,000 crore bid of Reliance Industries and JM Financial Asset Reconstruction Co to acquire distressed Alok Industries. The insolvency process against Alok Industries was initiated in July 2017 on a plea filed by the company's financial creditor State Bank of India.
"However, the money is yet to come for the want of court approvals," a banker said.
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