homefinance NewsExpect faster resolution of companies like Bhushan Power, Alok Industries: Edelweiss ARC
Expect faster resolution of companies like Bhushan Power, Alok Industries: Edelweiss ARC
The Essar Steel judgement indicates that there will be a faster resolution of companies like Bhushan Power and Alok Industries, according to RK Bansal, MD of Edelweiss Asset Reconstruction Company.
“Essar Steel judgement by Supreme Court has solved some of the tricky issues and it's clear now... what’s the intent of the law and based on that, some of the cases which are stuck like Bhushan Power, Alok, etc. - we should be able to get faster recovery in those cases,” Bansal said in an interview with CNBC-TV18.
Global steel giant ArcelorMittal on Monday said it has completed the acquisition of Essar Steel, marking its entry into the Indian steel sector. ArcelorMittal last week transferred over Rs 40,000 crore to SBI, Essar Steel's lead banker, to settle all creditors' dues.
“There is nothing like Essar Steel because it's Rs 42,000 crore and I do not think there are many cases except Bhushan Power and Steel which is a big one; all other cases are in the range of Rs 2,000-5,000 crore,” added Bansal.
Speaking about IBC mechanism, Bansal said, “Maximum recoveries have happened in steel up to now; in fact, all the large cases happen to be in steel because commodity sector is always easy to resolve and to be brought under Insolvency and Bankruptcy Code (IBC).”
According to him, there are industries like consumer sector where IBC may not hold good.
“Power is another sector where recoveries are expected though it may not be as good as steel; a few cases are being resolved outside IBC and a few cases may go through IBC also. So power is the next sector,” said Bansal.
Talking about NBFCs, he added, “Overall the situation has eased and money is available at a slightly lesser rate than what it was available earlier."
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